Annual Report
2024
Management report Financials
Welcome to CVC
We welcomed CVC Funds as minority investor and
strategic partner, alongside our majority owner, the
Hempel Foundation, starting a new chapter in our
company’s story and unlocking new opportunities
for growth, see page 7.
INTRODUCTION 3
At a glance 4
Performance highlights 2024 5
Five-year summary 6
Letter to stakeholders 7
OUR BUSINESS 9
Business model 10
Strategy 11
Sustainability framework 12
Segments 14
Decorative 15
Marine 16
Energy & Infrastructure 17
Performance review 18
SUSTAINABILITY PERFORMANCE 21
Sustainability leadership 22
Environment 26
Social 32
Governance 36
CORPORATE GOVERNANCE 39
Corporate governance 40
Board of Directors 44
Executive Group Management 46
Risk management 47
Tax 51
STATEMENTS 54
Management’s statement 55
Independent auditor’s report 56
Independent limited assurance report on ESG data 58
ESG 60
ESG data and accounting policies 61
FINANCIAL STATEMENTS 69
Consolidated financial statements 70
Parent company financial statements 113
EUR 392 million
EBITDA, adjusted
Hempel delivered its best bottom-line result to
date with an EBITDA of EUR 392 million in 2024.
Contents
Cover image: Hempel’s global coating advisors ensure efficient, high-quality application
and process optimisation to maintain our customers’ assets in the agreed condition.
Hempel Annual Report 2024
2
Introduction
→ At a glance
→ Performance highlights 2024
→ Five-year summary
→ Letter to stakeholders
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 3
1915
We were founded in 1915 in Denmark and are today
owned by the Hempel Foundation and CVC Funds.
Over the past 109 years, we have become a world-leading
supplier of paint and coating solutions and a trusted
partner for our customers worldwide.
With a global reach, we serve
customers around the world
 *
No. of colleagues
7,200 +
No. of paint stores
340
No. of countries we serve
100+
Financials
2024 revenue
(EUR m)
2,185
2024 EBITDA margin,
adjusted
(%)
17.9
Segments
Energy & Infrastructure
0.1%
Total organic revenue growth
823
Revenue in EUR m
Decorative
2.4%
Total organic revenue growth
653
Revenue in EUR m
Marine
- 5.8%
Total organic revenue growth
709
Revenue in EUR m
At a glance
Our purpose is to shape a brighter future
with sustainable coating solutions.
We collaborate and innovate with our
customers to deliver solutions that protect,
beautify and improve the performance of
their most valuable assets — whilst always
keeping sustainability at the forefront of
everything we do.
Sustainability commitments and recognitions
No. of brands
6
No. of production sites
25
No. of innovation
centres
14
No. of nationalities
across Hempel
93
* Numbers as of 31 December 2024.
Organic growth
(%)
- 1.3
1.3
percentage points
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 4
Performance highlights 2024
3
Organic growth
1
(%)
Revenue
(EUR m)
Free cash flow
1
(EUR m)
EBITDA margin, adjusted
1
 EBITDA (EUR m)
EBITDA margin (% of revenue)
Governance
Total supplier spend
screened
Sustainability screening of our
suppliers (%)
Environment
Scope 1 & 2 reduction
from 2019 baseline
(%)
Social
Women in leadership
(%)
1
Please see definition on page 112.
2
Excluding company vehicles, we reached a reduction of 70% in Scope 1 & 2. Amounts in absolute tonnes are shown on page 62.
3
The 2023 profit and loss and ESG statements have been restated to reflect the classification as a discontinued operation of
Hempel’s J.W. Ostendorf and Renaulac businesses. For further information, please see Note 4.6 Discontinued operations.
31%
2024
31%
2024 target
90%
2026 target
65%
2
2024
70%
2025 target
61%
2024
2,170
2,185
29
139
360
392
17.9
16.6
20232024 20232024
20232024
14.1
- 1.3
20232024
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 5
Five-year
summary
(EUR m, unless otherwise stated) 2024 2023
5
2022 2021
1
2020
1
Profit and loss
Revenue 2,185 2,170 2,159 1,744 1,541
EBITDA 391 348 219 196 176
EBITDA, adjusted 392 360 257 205 185
Amortisation, depreciation and impairment 114 113 105 90 77
Operating profit 277 235 114 106 99
Financial items, net - 57 - 93 - 58 - 17 - 28
Profit before tax 220 142 56 89 71
Net profit from continuing operations 170 122 37 58 N/A
Net profit for the year 80 50 35 63 50
Financial position
Total assets 2,631 2,669 2,655 2,466 1,542
Investment in tangible assets 52 59 91 113 77
Shareholders’ equity 1,058 502 519 526 456
Net interest-bearing debt 542 1,075 1,052 907 120
Cash flow
Total cash flow from operating activities 225 127 72 69 191
Cash flow from acquisitions / divestments of enterprises 4 6 - 28 - 511 0
Cash flow from net investments in property, plant and
equipment and intangible assets
- 90 - 104 - 107 - 87 - 65
Free cash flow 139 29 - 63 - 529 126
Dividend distributed to shareholders - 157 - 26 - 33 - 25 - 25
Working capital
Net working capital (NWC) days 76 66 72 70 70
(EUR m, unless otherwise stated) 2024 2023
5
2022 2021
1
2020
1
Ratios (%)
Organic growth - 1.3 14.1 12.7 5.9 3.2
Gross margin 43.4 41.6 36.3 37.8 39.1
EBITDA margin 17.9 16.0 10.1 11.2 11.4
EBITDA margin, adjusted 17.9 16.6 11.9 11.8 12.0
Operating profit margin 12.7 10.8 5.3 6.1 6.4
Return on invested capital 12.9 11.1 5.6 7.5 9.5
Equity ratio 40.2 18.8 19.5 21.3 29.6
Cash conversion 92 76 64 59 129
Leverage ratio 1.4 3.1 4.2 3.7 0.7
Environment, social and governance (ESG)
Scope 1 & 2 emissions (tonnes CO
2
e) 18,767 24,972 19,090 29,710 39,872
Waste to landfill (tonnes) 1,586 934 1,353 1,630 1,666
Average number of employees (FTEs) 6,932 6,788 7,343 6,746 6,099
Gender diversity in leadership positions
2
, female/male 31/69 29/71 29/71 23/77
3
21/79
Satisfaction and motivation 74 75 72 73 N/A
4
Suppliers screened through Hempel Procurement
Sustainability Screening (% of spend) 61 44 40 22 N/A
6
For definitions of financial ratios, see page 112.
1
Comparative figures for 2021 have been restated to
reflect changes in accounting policies and presentation of
discontinued operations, see note 1.1. 2020 has not been
restated.
2
Leadership positions with minimum 3 direct reports.
3
Data from Farrow & Ball was not included in 2021.
4
In 2020, due to COVID-19 and the unusual work
environment, the employee engagement survey was only
conducted among PC users.
5
The 2023 profit and loss and ESG statements have been
restated to reflect the classification as a discontinued
operation of Hempel’s J.W. Ostendorf and Renaulac
businesses. For further information, please see Note 4.6
Discontinued operations. 2020-2022 have not been restated.
6
The Hempel Procurement Sustainability Screening was
initiated in 2020.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 6
Letter to stakeholders
from our Chair and CEO
2024 was a defining year in Hempel’s history
in which we took important steps to ensure the
company’s long-term success and impact.
We welcomed CVC as minority investor and strategic partner, along-
side our majority owner, the Hempel Foundation, starting a new
chapter in our company’s journey. CVC brings leading capabilities to
support us in unlocking new opportunities for growth.
Over the last eight years, we have transformed Hempel and almost
trebled our profitability. We aim to become an industry-winning
enterprise with a profound positive impact on our customers, owners,
people and the world around us. This ambition translates to being
among the top performers in the paints and coatings industry when
it comes to financial and ESG performance.
Executing on Double Impact
Despite the external challenges of the past year, we remain steadfast
in our commitment to long-term sustainable growth. Our ambition
is to run a highly profitable business that enables us to reinvest
in Hempel and contribute positively to society through our brands
and technologies.
Guided by the principles of our Double Impact strategy, we are focused
on driving innovation, digitalisation and operational scalability. These
efforts not only enhance our profitability but also help us grow efficiently
and simplify our processes, so we can better serve our customers.
To fully realise our potential and deliver on our strategic goals, we
placed a strong emphasis on culture in 2024. This included introducing
a set of shared commitments to guide how we engage and deliver
on our priorities together. Looking ahead, we will continue to evolve
Hempel’s culture, creating value for our customers, owners, society
and employees alike.
Elevating innovation for our customers
Future success in the paints and coatings industry will be driven by
groundbreaking technologies and innovation. To move us further along
this path, we established a new Technology function that comprises
Research & Development, Procurement and Sustainability. This ensures
an even closer link between our customers’ needs, sustainability and
product development.
With these changes, we elevated innovation within Hempel,
intensifying our strategic focus on developing differentiating solutions
and providing superior customer experiences. As part of this, we
Richard Sand
Chair of the Board
of Directors of Hempel A/S
Michael Hansen
Group President &
Chief Executive Officer
of Hempel A/S
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 7
welcomed Emilie Barriau as Chief Technology Officer, a new position
in the Executive Group Management.
We also strengthened our Board of Directors by welcoming three
new members: Britt Meelby Jensen, Christoffer Sjøqvist and
Michael Lavrysen. There is no doubt that their deep knowledge
and unique experiences will support Hempel’s accelerated growth
journey. In addition, we were delighted that Søren P. Olesen was
appointed Deputy Chair. Hempel will benefit greatly from his focus
on sustainability, innovation and technology in the years ahead.
New products and solutions
2024 saw the launch of many new products and solutions for our
customers.
In the Marine segment, we launched Hempaguard Ultima, a new
silicone coating system to enhance ships’ hull performance. We work
relentlessly to accelerate the decarbonisation of shipping, and our
range of Hempaguard solutions are key to this goal. In the Energy &
Infrastructure segment, our solutions extend the lifetime of critical
infrastructure assets, hereby lowering costs and emissions for
our customers. In 2024, we launched a new Avantguard solution
for infrastructure assets that require long-term protection in high
corrosivity environments. We were proud to continue to inspire
consumers in the decorative space with the Purnon Papers, a new
wallpaper line by Farrow & Ball.
These are just a few of the new solutions we launched during the
year, underlining our continued efforts to meet and exceed our
customers’ needs by enabling them to beautify, protect and improve
their assets while lowering their costs and carbon footprint.
Divesting J.W. Ostendorf and Renaulac
During the year, we decided to sharpen focus in our Decorative
segment by concentrating on our full-service businesses. To this end,
in August, we successfully completed the divestment of J.W. Ostendorf
and Renaulac. This transition included the transfer of a production
site in Germany, stores in France, around 500 skilled colleagues and
an established portfolio of customers to the new owner.
2025 outlook
In 2025, we will continue our journey to grow Hempel. We expect to
see mid-single-digit organic revenue growth and an EBITDA margin
above 17%.
Thank you
As members of the Board of Directors and the Executive Group
Management, we are deeply committed to Hempel and the road
ahead. We would like to thank our customers and other stakeholders
around the world for trusting Hempel as your partner. We would also
like to extend thanks to the most important part of our business – our
Hempel colleagues around the world – for your dedication and efforts
during the past year. Your commitment is nothing short of inspiring.
“In 2024, Hempel delivered the best bottom-
line result to date with an adjusted EBITDA
of EUR 392 million.”
— Michael Hansen, Group President & CEO
Shared commitments
In 2024, we introduced a set of shared commit-
ments to shape our culture and guide us in how
we engage and deliver on our strategic priorities.
At our annual Hempel Leadership Summit,
100+ of our leaders took part in co-creating
these commitments.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 8
Our business
→ Business model
→ Strategy
→ Sustainability framework
→ Segments
→ Decorative
→ Marine
→ Energy & Infrastructure
→ Performance review
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 9
OUR BUSINESS
Across the world, our products and solutions help our customers protect, beautify
and improve performance of their most valuable assets. Sustainability is at the
heart of our business and incorporated into every step of our business model.
Business model
INPUT
VALUE
Customers
We continuously engage with our
customers to understand and
meet their evolving business and
sustainability needs.
Stakeholders
We build trusted relationships
with consumers, suppliers, peers,
regulators, and other stakeholders
across our value chain. We gain
insights to continue to cater to
consumer lifestyles and needs.
Employees
Our team of +7,200 colleagues
are driven by our purpose and
ambitions to make a difference for
our customers and society. We rely
on their input and expertise to
reach our goals.
Procurement of resources
We depend on raw materials, such
as epoxy, titanium dioxide and
metallic pigments to produce our
solutions.
Customers & consumers
We deliver solutions and services that
build new value propositions for our
customers, while helping them reduce
their environmental impact. We deliver
inspiring products to consumers that
beautify their living spaces.
Employees
We nurture a diverse and inclusive
workplace with a shared culture,
where our employees can succeed
and develop.
The world around us
Our products help protect assets
for longer, reducing their lifetime
environmental impact. We also
continuously work to reduce the
environmental impact of our own
operations.
Company & owners
Parts of our profits are reinvested into
our company. We also pay dividends
to our owners. Through the Hempel
Foundation, we support philanthropic
projects around the world.
Research & develop
We continuously develop expertise
across our segments to deliver best-
in-class solutions from chemistry to
application engineering. We actively
partner with our customers and
partners in the field.
Innovate
We are committed to innovating with
our customers to enable them to meet
their goals, using state-of-the art
processes across our 14 innovation
centres.
We drive innovation to generate
higher value for our customers and
stakeholders.
Produce & scale
We strive for greater excellence,
efficiency and scalability in our
production while reducing the
environmental footprint of our
operations.
Collaborate
We collaborate with suppliers to
shorten lead times and drive joint
decarbonisation efforts.
Development Production
Brand & sell
We work with our customers to
communicate the value and benefits
of our brands and solutions, so they
get the best possible experience, no
matter how or where they meet us.
Distribute
Our globally integrated supply chain
and store network allow us to deliver
our solutions to customers across the
world every day.
Advise & support
Our global coating advisors ensure
efficient, high-quality application and
process optimisation to maintain
customers’ assets in the agreed
condition. We help reduce costs and
waste, and improve environmental
performance. In our paint stores, we
provide advice and inspiration to our
private consumers.
Delivery, sale and support
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 10
Our purpose is core to who we are at Hempel. We want to shape
a brighter future with sustainable coating solutions. Our Double
Impact strategy is our journey towards delivering on that purpose.
Double Impact guides our efforts, priorities and investments as we
work to become an industry-winning enterprise that creates even
more value for our customers, employees, owners and society.
Partnering for greater impact
We progressed with our strategic ambitions during 2024,
executing on the plans we had for the year.
An important milestone was welcoming CVC as a minority investor
and strategic partner to accelerate long-term growth and create
even more value for our customers. CVC brings complementary
competencies and resources that will support our growth and plans
to accelerate our strategic ambitions under Double Impact. CVC’s
experience in making and integrating transformational acquisitions
will also be beneficial as our business continues to expand.
Organising for growth
In 2024, we focused on efficiency and standardisation across our
functions and segments to ensure that our organisation is scalable
for further growth. Scalability will give us a more harmonised global
setup, with smarter use of resources. This will allow us to grow
Hempel while increasing profitability.
Double Impact consists
of four strategic levers:
• Segment leadership
• Sustainability leader
• Scalable operations
• Trusted partner
It has three
enablers:
• Innovation
• Digitalisation
• People
We also made changes to our organisational setup to continue
to meet evolving customer needs through powerful innovation.
We established a new Technology function – comprising R&D,
Procurement and Sustainability – to ensure a closer link between
customer needs, sustainability and product development (see
page 40). These changes are elevating innovation within Hempel
and accelerating our strategic focus on developing differentiating
solutions and providing superior customer experiences.
Strengthening our market position
In 2024, we announced the divestment of two of our private label
decorative brands, J.W. Ostendorf and Renaulac. In doing so, we
sharpened the profile of our Decorative business to mainly focus on
full-service branded businesses with Crown Paints, Wattyl, Hempel,
and Farrow & Ball, our ultra-premium brand.
During the year, we continued to launch innovative products and
solutions across our segments, including Hempaguard Ultima,
a new silicone system for customers in the maritime industry.
Our Hempaguard range consists of high-performance coating solu-
tions that help our customers meet their sustainability targets as well
as enabling the decarbonisation of the maritime industry (read more
on page 16). We also launched Avantguard 750 Pro, which is ideal
for infrastructure projects requiring long-term protection in high
corrosivity environments (see page 17). Additionally, Farrow & Ball
introduced the Purnon Papers, a unique wallpaper collection for
consumers in our Decorative segment (read more on page 15).
Delivering on our strategy
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 11
We aim to become an industry-winning enterprise and make an
even bigger impact for our customers and the paints and coatings
industry. At the same time, we are working to reduce our environ-
mental footprint while amplifying the benefits we create for our
customers and for society.
Futureproof is our framework for delivering on our strategic goal of
sustainability leadership. Over the past four years, Futureproof has
both driven us towards our ambitious targets and prepared us for
the upcoming Corporate Sustainability Reporting Directive (CSRD)
requirements. We are proud that we already transparently document
our progress and report on our ESG targets in our sustainability
statements, starting on page 21.
As a part of the paints and coatings industry – an industry that
uses chemicals – our success will depend on our ability to reduce
our environmental impact across our full value chain by phasing out
or replacing hazardous and carbon-intensive raw materials while
maintaining the high performance of our value-adding solutions.
We have structured our commitment to sustainability with the aim
of supporting the UN Sustainable Development Goals (SDGs),
acknowledging their significance not only to our business but also
on a global scale. We remain dedicated to prioritising the SDGs
where we can have the most substantial positive influence:
Futureproof
Our sustainability framework
focuses our efforts and commit-
ments on the four areas where we
can have the biggest impact:
Sustainability
framework
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 12
Enabling sustainable leadership
through innovation
Sustainability is deeply ingrained in how we innovate and develop
our solutions. We are committed to accelerating innovation for a clear
reason: Our customers rely on us to deliver innovative solutions that
help them reduce their environmental impact and deliver on their
sustainability ambitions.
To this end, we continuously evolve our portfolio of products and
services to deliver differentiated and value-adding solutions to our
customers.
With our expertise and geographical presence, combined with our
long-standing partnerships, we are well positioned to lead the coatings
industry within sustainability by reducing our own environmental
footprint and, more importantly, that of our customers. We do this
through our unwavering focus on technology and innovation, which
delivers both financial and environmental value to our customers
while also driving sustainable growth for Hempel.
Accelerating innovation to
increase positive impact
In 2024, we elevated the role of innovation in our organisation,
anchoring it within our executive leadership by creating a new
Technology function that brings together R&D, Procurement and
Sustainability. With this new function, we aim to foster a culture
where creative thinking and groundbreaking ideas thrive, ultimately
propelling us forward on our journey to deliver on our strategy,
particularly within sustainability leadership across our value chain.
There is an increasing urgency to deliver sustainable solutions, as
well as heightened regulatory requirements. This requires speed but
has also added complexity to the markets we operate in. Our new
Technology function sets the stage for accelerated innovation,
enabling us to bring customer-focused, sustainable solutions to the
market faster and more efficiently.
Accelerated innovation is not just about speed; it is also about
increasing impact by aligning customer needs with our own
sustainability goals. In practical terms, this means ensuring our
efforts to minimise resource use, extend the lifetime of our customers’
important assets and improve end-of-use disposal options are
commercially viable and clearly add value for our customers.
“ By uniting R&D,
Sustainability and
Procurement, we
will accelerate our
path to impactful
sustainable
solutions.”
— Emilie Barriau,
Chief Technology Officer
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 13
Hempel Annual Report 2024
Segments
Sales in Decorative grew 2.4% organically, landing at EUR 653 million.
Growth in the Decorative segment was mainly achieved by gaining
market share, despite a challenging market with subdued construction
activity and lower consumer demand from the rising cost of living.
This highlighted, among other things, the strength of our brands.
Our Crown and Wattyl brands – as well as Hempel Decorative Middle
East – all outperformed the market. Growth was driven by new
product launches, an expanded retail presence, and growth in our
store network.
In the premium market, we delivered growth and maintained a leader ship
position while continuing to strengthen our relevance with customers.
As announced, the divestment of J.W. Ostendorf and Renaulac in August
2024 marked the next step on our ambitious growth strategy, allowing
us to put greater strategic focus on growing our full-service businesses
in the Decorative segment.
Sales in Energy & Infrastructure grew 0.1% organically, landing at
EUR 823 million.
Growth in our Energy business was driven by the oil and gas sector,
with particularly strong performance in the Middle East. This was partly
attributed to our leading coating solutions for corrosion under insulation,
which enabled us to secure new projects and leverage our robust market
presence in the region. At the same time, sales declined in the renewables
business, due to market contraction in EMEA and intense competition.
Despite these challenges, we maintained our strong market-leading
position in wind tower coatings.
Sales in our Infrastructure business declined, mainly due to global
macroeconomic instability. However, growth in strategic areas – such as
passive fire protection and infrastructure technologies, which enhance
safety, improve sustainability, and reduce costs for our customers –
contributed to a satisfactory overall performance for the business.
0.1%
2.4%
- 5.8%
Organic growth
Organic growth
Organic growth
823653 709
Revenue in EUR m
Revenue in EUR m Revenue in EUR m
Sales in Marine declined 5.8% organically, landing at EUR 709 million.
Sales in 2024 were the second highest ever recorded, surpassed only
by the record-breaking sales of 2023.
The decline in Marine sales was driven by a number of factors, including
price adjustments and the postponement of vessel dockings, primarily
related to the Red Sea crisis.
At the same time, there was an industry-wide shift toward premium
technologies. As a result, our premium solutions attracted new
customers, and we experienced a record year in volume for our
Hempaguard solutions.
Our strong product offerings in this area are recognised to be industry-
leading in terms of fuel efficiency and CO
2
₂reduction, and we continued
to secure new customer contracts. Our Hempaguard solutions remain a
significant strategic focus area for us in the coming years. They will play
a pivotal role in supporting our customers’ efforts to achieve meaningful
reductions in CO
2
emissions, aligning with the industry’s sustainability
goals and strengthening our market leadership position.
DECORATIVE ENERGY & INFRASTRUCTURE MARINE
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 14
Painting a
brighter future
Decorative
As a full-service decorative coatings company, we offer a comprehen-
sive range of paints, wallpapers and colour consultancy services to
DIY consumers, designers, retailers and professional painters.
Our Decorative brands inspire customers with on-trend colours and
modern and timeless paints. From premium paints for the home to
antibacterial coatings for hospitals and white-label options for major
DIY chains, we provide high-quality paint solutions that utilise
forward-thinking paint technology, such as bio-based technologies
or new and more sustainable packaging.
Inspiration, quality and sustainability remain at the heart of what we
do in Decorative. In 2024, we strengthened both our retail business
and our internal IT systems. We opened new stores and added
over 40 new third-party outlets in the Middle East, implemented
our SAP enterprise resource planning software in Wattyl, grew
our business in the US, and expanded our e-commerce business.
We successfully reestablished Wattyl’s presence in Bunnings, the
largest DIY retailer in Australia with 78% share of market, launching
our exterior Solagard ‘Ready to Go’ range in 242 stores. In addition,
we launched new products, expanded our collections, and set higher
standards for store operations, all while focusing on sustainable
solutions in collaboration with our customers.
Despite challenging market conditions, our Decorative brands
outgrew the market, gaining market share in 2024.
242 stores
Wattyl launched our exterior Solagard
‘Ready to Go’ range in 242 Bunnings
stores across Australia.
Innovations
• Farrow & Ball launched Purnon Papers, a unique
wallpaper collection featuring five designs, from delicate
florals to intricate damasks, inspired by patterns from
Château de Purnon in France.
• Crown was recognised by Marie Claire UK as the UK’s
top decorating brand for sustainability, an award that
spans all decorating brands, not just paint.
• Hempel Decorative Middle East enhanced its
interior range by introducing Topaz Signature, a new
premium emulsion brand, and introduced Hempafloor
Polyurethane Membrane, a waterproofing coating
solution for carparks.
Sustainability highlights
• Farrow & Ball switched to 100% bio-based binders in
selected products. It is also the only vertical paint brand
of its size to receive B Corp certification, an independent
verification that a business meets the highest
standards of social and environmental performance,
public transparency and legal accountability.
• Under its Project Possible initiative, Crown Paints
recycled over 1 million paint cans and increased the
content of recycled plastic in its packaging by 81%,
earning recognition from the British Coatings Federation
and Marie Claire UK.
• Hempel Decorative Middle East expanded sales of
water-based paints and maintained record-low Volatile
Organic Compound (VOC) levels.
• Wattyl is a founding member of PaintBack, an industry-
led scheme for the collection of post-consumer paint in
Australia. Over 85% of Australians are a short drive from
a PaintBack location, ensuring paint disposal facilities
are easily accessible to the majority of the population.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 15
Marine
Committed to innovation
and sustainability
As a trusted advisor and supplier to the maritime industry, we combine
world-class coatings, services and advisory to help customers protect
their maritime assets for longer, while lowering operating costs and
reducing emissions. We continue to lead the industry in sustainable
maritime coating solutions, aligned with global decarbonisation goals.
In 2024, we launched our next-generation silicone hull coating
solution, Hempaguard Ultima. The solution builds on the success
of previous Hempaguard coatings, which utilise patented Actiguard
ingredients to provide the most effective fouling protection on the
market. Across the full dry docking cycle, this unique solution delivers
greater fuel efficiency and emissions reductions to customers.
High-performance hull coating is one of the single most impactful
ways our customers can improve the energy efficiency of their vessels
– and one of the simplest and fastest ways to comply with energy
efficiency and carbon intensity regulations in the maritime industry.
Since their launch in 2013, our high-performance Hempaguard hull
coating solutions have been applied more than 4,000 times. This
has helped our customers in the maritime industry reduce their CO
2
emissions by 29 million tonnes compared to market average hull
coating solutions. We currently see rapid growth and interest in our
Hempaguard solutions across customer segments. Dry bulk and
tanker shipping are the fastest growing, with more than 100% growth
in Hempaguard applications in the last three years.
Innovations
• We launched our Hempaguard Ultima hull coating silicone-
system, which sets a new standard in antifouling perfor-
mance to significantly reduce vessel fuel costs and emis-
sions. The leading performance of Hempaguard Ultima is
achieved by combining the new Hempaguard XL topcoat,
also launched in 2024, with Hempaguard X7 or X8.
• We launched smart alerts for both Hull Performance and
Sea Stock. The Hull Performance Alerts, which are part
of Hempel’s AI-enhanced performance platform SHAPE,
monitor the fouling pressure of all commercial vessels in
the world fleet and prompt our customers in case their
vessels become at risk of fouling. The Sea Stock Alerts
continuously monitor the schedule and next destination
of our customers’ vessels and advise on the most suita-
ble port for sea stock coating deliveries.
Sustainability highlights
• As a leading provider of ESG assurance and one of the
leading Class Societies, DNV conducted an independent
verification of Hempel’s Hempaguard X7 data, which,
supported by strong evidence, demonstrated that the
Hempaguard X7 could reduce a vessel’s CO
2
e emissions
by decreasing fuel consumption by up to 20% compared
to standard coatings, while also minimising average
speed loss by 1.4%.
• These fuel and emissions reductions contribute to
lowering the overall environmental impact of the
maritime industry, assisting shipowners and operators’
decarbonisation efforts.
• Hempel joined RightShip’s Zero Harm Innovation Part-
ners Program. The world’s leading ESG-focused digital
maritime platform, RightShip is committed to setting
a global benchmark in the maritime sector, with the
ultimate goal of achieving zero-harm. As part of the
collaboration, our Hempaguard hull coating underwent
a meticulous review process and is now approved for
the Zero Harm Innovation Partners Program.
Saving 29 million
tonnes of CO
2
Our Hempaguard hull coatings helped customers
reduce their CO
2
emissions by 29 million tonnes.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 16
Our solutions extend the lifetime of energy and infrastructure assets
around the world, with a strong focus on sustainability and value chain
efficiency. We continue to grow our Energy & Infrastructure segment,
extending our leadership positions by launching new solutions and
unlocking new markets. In 2024, we celebrated 10 years of our
Avantguard superior corrosion protection technology.
2024 was a good year for energy and infrastructure projects in
the Middle East, and we succeeded in securing a number of major
projects in the region due to our focus on owners, fabricators and
applicators. We also continued to grow our passive fire protection
(PFP) coatings range offering high-performance PFP coatings to both
infrastructure and energy customers.
For our Energy customers, our value adding solutions contribute
to reducing operational costs and emissions while extending the
lifetime of their assets. We have a strong position across the
energy industry, particularly in renewables where we offer a full
range of high-performance, high-productivity solutions with a focus
on sustainability. In 2024, we maintained our leadership position
in wind turbine towers while increasing our focus on the offshore
wind industry. We also entered the wind blades market, securing
important projects in leading edge protection (LEP) maintenance
while introducing our blades assortment to original equipment
manufacturers (OEMs) and service providers.
In addition, we solidified our position in the oil & gas market.
Corrosion under insulation (CUI) remains one of the most critical
issues in the downstream segment and we grew our leadership
position in 2024 with the launch of Hempatherm IC, a new insulation
coating system for energy conservation and protection against
CUI. The advantages of using coatings for insulation compared
to mechanical insulation, which is the current industry standard,
include increased asset protection, heat savings and safety.
Innovations
• We launched Avantguard 750 Pro, an ideal product for
projects requiring long-term protection with low volatile
organic compounds in high corrosivity environments.
• We launched Hempafire Pro 320, a new PFP coating with
a 60-minute fire rating.
• We rolled out our new best-in-class PFP estimation and
engineering tool for specifiers, called HEET Dynamics
(Hempel Estimation and Engineering Technology).
The software solution enables fabricators to perform
PFP estimations quickly, easily and accurately.
• Leveraging our knowledge and capabilities in PFP, our
Energy team has now fully entered the PFP energy market,
with Hempafire XTR 100 delivering its first successes.
• We launched Hempatherm IC, a new insulation coating
system for energy conservation and protection against CUI.
Sustainability highlights
• It is estimated that repair and maintenance work on
corroded steel structures will be responsible for 9.1% of
global CO
2
emissions by 2030. Our Avantguard coating
technology provides a unique platform for reducing
corrosion, which in turn reduces emissions from
corrosion maintenance.
• We launched Hempaprime Shield 820, a primer for
trucks and trailers that combines superior protection
with an excellent finish. Like our other Avantguard-
based coatings, Hempaprime Shield 820 extends an
asset’s service life and maintenance intervals, reducing
emissions associated with repair.
• With extensive testing and verification by DNV, we have
proven that it is possible to substitute both galvanisation
and thermal sprayed metallics with Avantguard in severe
environments, such as offshore wind turbine towers.
This could significantly reduce CO
2
emissions for our
customers.
10 years
2024 marked 10 years of our Avantguard
superior corrosion protection technology.
Energy & Infrastructure
Protecting assets, lowering
emissions and reducing costs
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 17
Decorative
Energy &
Infrastructure
Marine
709
823
391
653
348
2.4 0.1- 5.8
2,170
14.1
2023
2,185
- 1.3
2024
16.0
17.9
20232024
Revenue and earnings
REVENUE AND ORGANIC GROWTH
Total revenue in 2024 reached EUR 2,185 million,
while organic growth in the year, which is adjusted
for currency fluctuations and for acquistions and
divestments, was a negative 1.3%.
Our Decorative segment achieved 2.4% organic
growth, with revenue amounting to EUR 653
million. This growth was driven by both the mid-
and premium-market businesses.
Our Marine segment saw negative organic
growth of 5.8%, reporting revenue for the year
of EUR 709 million. This decline reflects a
very strong 2023 baseline and was driven by
increased competition on pricing and the timing
of orders in the drydock business.
Our Energy & Infrastructure segment delivered
organic growth of 0.1%, ending the year with
revenue of EUR 823 million. This consistent
result was achieved despite macroeconomic
challenges, thanks to volume expansion in key
strategic areas, including passive fire protection
(PFP) and oil and gas.
GROSS PROFIT AND MARGIN
Gross profit increased by 5% in 2024, ending the
year at EUR 948 million. The gross profit margin
increased by 1.8 percentage points, ending the
year at 43.4%.
Revenue and organic growth
 Revenue (EUR m) Organic growth (%)
The positive trend in both gross profit and margin
is attributed to increased demand for high-value
proposition products, our optimised global pro-
duction and warehousing footprint, including the
ramp-up of new production sites in China, and a
decline in raw material costs.
SALES, DISTRIBUTION AND
ADMINISTRATIVE COSTS
Sales, distribution and administrative costs
amounted to EUR 671 million in 2024, EUR 4 million
higher than 2023.
Prudent management and control of operating
expenses helped to keep costs broadly level with
the prior year, allowing us to increase investment
in digitalisation and further optimisation of the
organisation. These investments are critical to our
ability to deliver future growth and further bottom
line improvements.
EBITDA and EBITDA margin saw significant
improvements in 2024, reaching EUR 391 million
and 17.9% respectively. This was achieved despite
an overall decline in organic growth, primarily due
to improvements in gross margin and robust cost
management discipline.
FINANCIAL ITEMS AND FOREIGN EXCHANGE
Financial items (net) amounted to EUR 57 million,
a decrease of EUR 36 million from 2023.
Revenue and organic growth by segment
 Revenue (EUR m) Organic growth (%)
Performance review
Figures on this page exclude the result of J.W. Ostendorf and Renaulac for both 2023 and 2024.
EBITDA and EBITDA margin
 EBITDA (EUR m) EBITDA margin (% of revenue)
This decrease includes a reduction in foreign
exchange losses. In addition, interest expenses
decreased, driven by the issuance of shares to the
new minority shareholder, CVC Funds, the proceeds
from which were used to reduce debt financing.
TAX AND NET PROFIT
Tax for 2024 amounted to EUR 50 million compared
to EUR 20 million in 2023, resulting in an effective
tax rate of 22.7% and 14.0% respectively.
Net profit for the year from continuing business
amounted to EUR 170 million, up from EUR 122
million in 2023.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 18
1.4
11.1
2023
12.9
2024
1,075
542
3.1
20232024
2023
458
1
2024
450
2023
300
1
2024
336
2023
309
1
2024
317
Trade
receivables
Trade
payables
Inventory
Financial position and related key figures
TOTAL ASSETS
At 31 December 2024, total assets amounted
to EUR 2,631 million, up from EUR 2,553 million
at 31 December 2023, excluding J.W. Ostendorf
and Renaulac.
Addtions to tangible and intangible assets
amounted to EUR 84 million mainly related to
investments in ERP systems, factory optimisations,
and ongoing asset replacements in factories.
NET WORKING CAPITAL
In line with the development in revenues and
costs, the trade receivables balance of EUR 450
million remains consistent with the 2023 balance
of EUR 458 million.
Increase in the inventory and trade payables
balances of EUR 36 and EUR 8 million respectively
were mainly driven by a build of raw materials that
were in short supply in the market.
Return on invested capital
(%)
Net working capital
(EUR m)
NIBD and leverage
 NIBD (EUR m) Leverage (NIBD / EBITDA)
Performance review
1
2023 balances exclude amounts related to J.W. Ostendorf and Renaulac.
RETURN ON INVESTED CAPITAL
Return on invested capital (ROIC) from continuing
operations increased to 12.9% in 2024, up from
11.1% in 2023.
NET INTEREST-BEARING DEBT
AND LEVERAGE RATIO
Net interest-bearing debt (NIBD) at 31 December
2024 amounted to EUR 542 million, a decrease
of EUR 533 million from 31 December 2023.
This decrease is primarily attributable to the
issuance of shares to the new minority shareholder,
CVC Funds, and consequent repayment of debt,
along with strong free cash flow, generated by the
group during the year.
The leverage ratio improved significantly to
1.4x in December 2024, compared to 3.1x in
December 2023.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 19
20232024
20232024
225
127
20232024
139
29
- 86
- 98
20232024
- 135
12
Cash flow
1
FREE CASH FLOW
Free cash flow amounted to EUR 139 million in
2024, up from EUR 29 million in 2023.
This improvement was driven by the positive
development in operating profit as well as lower
impact from increases in net working capital in
2024 compared to 2023.
Cash outflow from investing activities amounted
to EUR 86 million in 2024 and relates to investment
in upgraded ERP systems and global production
footprint.
Cash flow from operating activities
(EUR m)
Cash flow from investing activities
(EUR m)
Free cash flow
(EUR m)
Performance review
CASH FLOWS FROM FINANCING ACTIVITIES
Cash outflows from financing activities amounted
to EUR 135 million in 2024.
Dividends distributed to shareholders amounted
to EUR 157 million, including an extraordinary
dividend of EUR 132 million.
Proceeds from the issue of equity, related to
the new miniority shareholding, amounted to
EUR 600 million.
Net repayment of borrowings for the year
amounted to EUR 523 million.
Cash flow from financing activities
(EUR m)
1
Cash flow for 2024 includes amounts related to J.W. Ostendorf and Renaulac up to the date of disposal.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 20
Sustainability
performance
→ Sustainability leadership
→ Environment
→ Social
→ Governance
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 21
Sustainability
leadership
Sustainability leadership is a key lever of our Double Impact strategy.
It guides our work to create long-term value for our customers and to
continuously improve our environmental footprint and amplifying the
benefits we create for our customers and for society. This dedication
to responsible business practices helps us to deliver on our
sustainability performance ambitions – now and in the future.
Throughout 2024, we took significant strides in our sustainability
initiatives, with a focus on reducing our environmental footprint,
enhancing our social impact, and maintaining our strong corporate
governance standards. Scope 3 was a main focus in 2024 to
showcase Sustainability Leadership. We created comprehensive
roadmaps for our segments, focusing on reducing overall Scope 3
emissions. Our target for 2025 is to accelerate execution and create
strong governance to enable Scope 3 annual reduction. We have
seen a slight increase in Scope 3 compared to baseline year 2019,
related to the increase of our business size. We are committed to
executing systematically on our roadmaps in 2025.
As regulatory requirements evolve, and with the introduction of the
Corporate Sustainability Reporting Directive (CSRD), we are adapting
our practices to meet these requirements. Our goal is to deliver
transparent, comprehensive disclosures that accurately reflect our
progress and enable stakeholders to make informed decisions.
This section provides an overview of our key sustainability priorities,
approach, targets and actions. It is structured into E (Environment),
S (Social) and G (Governance) and provides details about our
impacts across our operations and value chain, as well as the
initiatives we are taking to align with emerging regulatory standards
and stakeholder expectations. We remain committed to driving
continuous progress on our sustainability journey and contributing
positively to solving global challenges.
For Hempel, sustainability leadership means
being the frontrunner within the paints and
coatings industry and enabling our customers
to meet their sustainability ambitions.
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 22
Hempel Annual Report 2024
Double Materiality
Assessment
We conducted a Double Materiality Assessment (DMA) in 2024
in accordance with the CSRD and the requirements set out
by the European Sustainability Reporting Standards (ESRS).
This assessment identifies and addresses the Environment,
Social, and Governance (ESG) matters that significantly impact
our business and broader society.
The purpose of a DMA is to identify sustainability matters that
have a significant financial impact on the company’s value creation
(financial materiality), and to assess the actual and potential impacts
our activities have on people, the environment, and the economy
(impact materiality).
Taking this two-fold approach allowed us to evaluate both financial
and impact materiality, ensuring that we address sustainability from
a perspective that meets the expectations of both legislation and
our stakeholders at large.
Methodology
To strengthen our DMA process and methodology, in line with the
ESRS, we incorporated several key considerations into the process.
Assessment of impacts, risks and opportunities (IROs)
The assessment of IROs included making scenario analyses of
identified impacts, risks and opportunities. We used a combination
of historical data analysis and internal subject-matter expert
consultation in interviews and workshops. The impacts identified
were rated on a scale of 1 to 5, based on severity and likelihood, to
enable us to prioritise issues that pose the most significant potential
effects on the organisation. We followed our internal Enterprise Risk
Management (ERM) framework to assess risks and opportunities,
based on magnitude and likelihood.
Integration of climate-related risks
Over the past years, we have systematically integrated climate-
related risks into our broader ERM framework. This involved assessing
risks using climate scenario analyses, third-party climate data, and
specialised risk evaluation tools. The insights were incorporated into
our ERM framework, ensuring that climate-related considerations are
embedded into both our strategic decision-making and day-to-day
operational planning. For further details on our approach to managing
climate-related risks, please refer to the Task Force on Climate-
Related Financial Disclosures (TCFD) table on page 67.
Preliminary results
The outcome of the DMA has ensured that we focus our efforts and
reporting on our most material ESG matters. They are: ESRS E1
(Climate Change), ESRS E2 (Pollution), ESRS E4 (Biodiversity &
Ecosystems), ESRS E5 (Resource Use and Circular Economy),
ESRS S1 (Own Workforce), ESRS S2 (Workers in the Value Chain),
and ESRS G1 (Business Conduct). In the following pages, we report
on our ESG efforts in our own operations as well as in our upstream
and downstream value chain in accordance with the most material
ESG matters listed above. As illustrated in our DMA overview on
page 24, we will start reporting on pollution as we mature our
approach and handling of this important area in the coming years.
Next steps
The DMA is an evolving process that we will revisit annually to capture
emerging impacts, risks and opportunities. We are committed to
further developing our assessment of both our financial and societal
impacts, ensuring that our Double Impact strategy remains aligned
with the expectations of our stakeholders and the changing regulatory
landscape.
As our assessment of ESG impacts, risks and opportunities and
reporting processes matures, we expect the quality of our disclosures
around the material ESG issues to improve accordingly. Not only will
this ensure that we comply with the CSRD in the years to come, it will
also ensure we make progress on our most material ESG issues.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 23
Material topics
Environment
E1 Climate change
1. Climate change adaptation
2. Climate change mitigation
3. Energy
E2 Pollution
4. Pollution of air
5. Pollution of water
6. Pollution of soil
7. Pollution of living organisms
and food
8. Substances of concern
9. Substances of very high concern
10. Microplastics
E3 Water and Marine Resources
11. Water
12. Marine resources
E4 Biodiversity and Ecosystems
13. Direct impact drivers of
biodiversity loss
14. Impacts on the state of species
15. Impacts on the extent and
condition of ecosystems
E5 Resource Use and Circular
Economy
16. Resources inflows, including
resource use
17. Resources outflows related to
products and services
18. Waste
Social
S1 Own Workforce
19. Working conditions
20. Equal treatment and
opportunities for all
21. Other work-related rights
S2 Workers in the Value Chain
22. Working conditions
23. Equal treatment and
opportunities for all
24. Other work-related rights
S3 Affected Communities
25. Communities’ economic, social
and cultural rights
26. Communities’ civil and political
rights
27. Rights of indigenous peoples
S4 Consumers and End-users
28. Personal safety of consumers
and end-users
29. Social inclusion of consumers
and end-users
30. Information-related impacts for
consumers and end-users
Governance
G1 Business Conduct
31. Corporate culture
32. Protection of whistleblowers
33. Animal welfare
34. Political engagement and
lobbying activities
35. Management of relationships
with suppliers, including payment
36. Corruption and bribery
FINANCIAL MATERIAL
DOUBLE MATERIAL
IMMATERIAL
Hempel’s double materiality matrix illustrates
key topics and sub-topics, evaluated across two
dimensions: Impact materiality and Financial mate-
riality, as outlined by EFRAG. The results shown
are preliminary because we expect to revisit them
on an annual basis. This matrix includes all
sub-topics within the ESRS standards, based on
their scores in the following dimensions:
IMPACT MATERIAL
Double Material: High impact and high financial materiality.
Impact Material: High impact but lower financial materiality.
Financial Material: High financial but lower impact materiality.
Immaterial: Low on both dimensions.
1
20 21 22 23 24
25
2 3 5 10
26 27 28 29 30
31
34
35
4 7 11 12 14 15
32
33
36
86 13 16 17 18
19
9
High
HighLow
Impact materiality
Financial materiality
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 24
ESG ratings and
external recognitions
We prioritise specific ESG ratings and reporting frameworks that are
recognised and used by our stakeholders, including customers and
financial institutions. Since 2022, we have been reporting according
to recommendations from the Task Force on Climate-related Financial
Disclosures (TCFD), Carbon Disclosure Project (CDP) and EcoVadis.
In addition, we have continued disclosing to the UN Global Compact.
As we transition towards the CSRD and ESRS requirements, we will
expand our disclosure on ESG in our integrated annual report for
2025 in line with legislation. We will evaluate the voluntary ESG
frameworks, such as CDP, on an ongoing basis to decide whether
we continue with these or replace them with CSRD.
EcoVadis
EcoVadis is a globally recognised provider of business sustainability
ratings, evaluating companies on ESG criteria. In January 2024,
we received our second corporate sustainability rating from EcoVadis,
achieving a score of 53 out of 100, above the paint industry average
of 47.
A notable achievement in this rating was our enhanced collaboration
with suppliers, where our score improved from 40 to 50 (out of 100),
earning us positive recognition and reinforcing our commitment
to sustainable practices. Our score is based on an independent
evaluation of input on our policies, actions and results within labour
and human rights, ethics, sustainable procurement and environmental
impact. We have established a structured process to address
EcoVadis’ corrective actions and are committed to following up on a
continuous basis and tracking to improve our progress.
UN Global Compact
Hempel has been signatory to the UN Global Compact since 2017.
In July 2024, we submitted our Communication on Progress to the
UN Global Compact. We continue to disclose and report on our
progress within the Sustanability Development Goals (SDGs) and are
also proud members of the Valuable 500, and EV100 Climate Group.
Disclosure requirements See page
Business model 10
Policies on
Human rights 33-34
Worker and social conditions 33-34, 37
Environment and climate 27-31
Anti-corruption and anti-bribery 37
Due diligence process See page
Activities during the year
Human rights 33-35
Worker and social conditions 33-35, 37
Environment and climate 27-31, 35
Anti-corruption and anti-bribery 37
KPIs and results 61-68
Sustainability risks 47-50, 67
Diversity in the Board of Directors
(including current gender composition
and target)
40-45
Diversity in management (including policy,
activities during the year and results)
33-34, 46,
64-67
Disclosure requirements, cf. §99a of the
Danish Financial Statements Act
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 25
Waste to landfill
We want to achieve zero waste to
landfill at our production sites by end
of 2025
Procurement sustainability screening
Achieve engagement with suppliers representing
70% of our total spend by 2025
Scope 1 & 2
Reduce CO
2
e emissions in our
own operations by 90% by 2026
Environment
Sustainability targets
With the ambition of being the sustainability
leader in our industry, we are continuously
working to reduce our environmental
footprint throughout our global operations
and towards our customers. As a coatings
company, we prioritise our efforts to reduce
greenhouse gas (GHG) emissions from our
operations, products and full value chain.
We aim to reduce waste and plastic content
in our own operations, as well as engaging
with our suppliers to overcome environmental
issues together. We will do this as we grow
in a sustainable way by decoupling growth
from our environmental impact.
- 65%
2025
- 97%
61%
2025 target: - 100%
2025 target: 70%
2021 2026
2026 target: - 90%
2021
2019
2025
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 26
Actions in our
own operations
E1 Climate Change: Reducing Scope 1, 2 & 3 CO
2
emissions
We have an ambitious goal to decarbonise our operations by achieving
a 90% reduction in Scope 1 & 2 emissions by 2026. As part of this
work, we are phasing out fossil-fuel equipment at our sites and
replacing it with electrical alternatives. We also aim to use renewable
electricity sources across key production sites and offices.
We have already started this journey by mapping all fossil-fuel driven
equipment in use at our production units around the globe and by
identifying replacement equipment that can deliver the greatest CO
2
savings at the lowest cost. In 2024, we executed on our plans by
replacing fossil fuel boilers/heating at our sites, and switching forklifts,
counterbalances and other equipment to electrical equivalents.
In total, we replaced items delivering 1,646 tons of CO
2
e savings.
Six of our production sites have achieved the milestone of replacing all
eligible fossil-fuel equipment
*
, and are running on renewable energy.
We are installing solar panels and purchasing grid-supplied
renewable electricity at our key sites. As we continue to roll out this
programme, we also take into consideration the level of access to
renewable energy in different countries. Therefore, during 2024, we
continued our investment in Renewable Energy Certificates (REC)
to help account for part of our Scope 2 footprint. At the same time,
we continued to assess new sources of grid-supplied renewables
as infrastructure develops internationally. In addition to the actions
above, we are also decarbonising our company car fleet and have
implemented ambitious plans in over 35 countries.
During 2024 we created strong roadmaps in all our segments,
focusing on reducing our overall Scope 3 emissions. Our target for
2025 is to start executing on the roadmaps and create a strong
governance structure to enable Scope 3 reduction.
We made significant progress towards our science-based
targets and ESG commitments in 2024. We are proud to
have reduced CO
2
emissions from our operations by 65%
from an updated 2019 baseline.
* Fire, safety equipment and back-up generators are exempt from replacement.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 27
Our roadmap to meet our science-based target
for Scope 1 & 2 CO
2
e emissions of a 90%
reduction from our baseline year of 2019
2024
Continued our journey to decarbonise production units and
extend to other types of premises
• Phased out over 50 fossil-fuel equipment items at production units
across the globe
• Expanded decarbonisation initiatives to non-production sites
(retail stores, warehouses and offices)
• Completed a comprehensive re-baselining exercise to account
for the changes in our business (e.g. acquisitions and divestments)
2021
Launched our sustainability framework
Materiality assessment conducted to set strategic direction and
sustainability goals. The outcome was the launch of Futureproof,
our sustainability framework, in February 2021
2020
Collected full inventory of Scope 1 & 2 CO
2
e emissions
from our production units in line with the reporting standard
Greenhouse Gas Protocol to set reduction targets and baseline
2022
Achieved validation of our science-based targets
by the SBTi in line with the 1.5°C pathway for Scope 1, 2 & 3 CO
2
e emissions
• Transitioned 9 sites to run on renewable electricity
• Invested in Renewable Energy Certificate schemes
2023
Expanded phase-out of fossil-fuel equipment, and implementation
of solar panels
• The installation of solar panels to generate renewable electricity with
focus on our Decorative and EMEA production sites
• Phase-out of fossil-fuel equipment in favour of lower carbon technologies
CO
2
e emission reductions in our own operations – our roadmap
We continue to include the fuel from our company vehicles in the
reporting scope. Even with this inclusion, we were able to achieve a
65% reduction of Scope 1 & 2 emissions. Excluding company vehicles,
our reduction was 70%.
2025
Full implementation of our company car programme to decarbonise
our fleet
• Roll-out of local decarbonisation plans for our company fleet
• Continue to phase out fossil fuel use across our production units
2026
Meet our science-based target for Scope 1 & 2 CO
2
e emissions
of a 90% reduction from our baseline year of 2019
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 28
E4 Biodiversity & Ecosystems: Risk & impact assessment
We recognise the importance of addressing the impacts our opera-
tions have on biodiversity, particularly in relation to the potential risks
to natural ecosystems in the areas where we operate. We are com-
mitted to safeguarding biodiversity as we continue to grow globally.
In 2024, we began to investigate and structure our work to
understand the current and future risks associated with our global
presence. This included a comprehensive assessment of our
operational sites, which include factories, offices, R&D facilities, and
warehouses. We considered several key factors for each site: the type
of operation (i.e. water or solvent-based paint production), the start
date of operation (which correlates with existing soil pollution data),
and the geographical location. We used the World Wildlife Fund’s
Biodiversity Risk Filter tool to evaluate both physical and reputational
risks at each location, ensuring a robust assessment of biodiversity
risks across our operational footprint.
To further understand the environmental pressure we have on
nature, we started a mapping process to identify which high-impact
commodities are material for Hempel. We used the Science Based
Targets Network (SBTN) High Impact Commodity List (HICL), and we are
following the Taskforce on Nature-related Financial Disclosures, (TNFD)
sector-specific guidance to assess high-risk natural commodities.
As we mature our assessment and management of this area, we
expect to be able to measure and report on data related to our
impact on biodiversity and ecosystems in the near future.
E5 Resource Use & Circular Economy: Waste management
and circularity
As we continue to work towards decoupling our material footprint
from our economic growth, monitoring and implementing initiatives
that address circularity and waste management of our operations
and products are a priority. These initiatives support our work
to reduce our material footprint, virgin material use and waste
generation – in our own operations and across our value chain.
We are committed to minimising the environmental impact of our
operations by significantly reducing waste sent to landfill. Our target
is to limit landfill to less than 1% of the total waste generated from our
own operations by 2025. For 2024, our goal was to achieve a 95%
reduction in waste sent to landfill at our production sites, compared
to a 2019 baseline (excluding acquisitions). We achieved a 97%
reduction in waste to landfill at Hempel production sites compared
to the 2019 baseline.
To support our waste reduction targets, we continued to expand our
Smart Scales initiative, an automated waste monitoring and reporting
system that is key to our paint recycling efforts. The initiative provides
real-time data to track progress against waste reduction targets.
Throughout 2024, we focused on enhancing data collection across
different sites and implementing rigorous data verification and assur-
ance processes to ensure data accuracy and reliability. The initiative
now includes all production units, including newly acquired sites.
We are also exploring opportunities to collaborate with secondary
paint manufacturers, particularly in countries with poor waste
handling, to increase reuse and recycling of paint materials.
These efforts aim to further reduce waste, optimise resource use,
and support our overall goal of transitioning towards a more circular
business model. You can read more about the paint can recycling
programme in our Decorative customer segment, on page 15.
“ In 2024, we
achieved a
97% reduction
in waste sent
to landfill at
production sites
compared to the
2019 baseline.”
<1%
Our Target is to limit waste to landfill to
less than 1% of total waste generated
from our own operations by 2025.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 29
Our upstream
commitments
E1 Climate Change: Supplier engagement for climate change
In addition to our work to decarbonise our operations, we also work
on reducing carbon emissions across our value chain. Our target
is to reduce Scope 3 emissions by 50% by 2030. A key part of this
involves working closely together with our suppliers on our joint
decarbonisation journeys.
Procurement Sustainability Screening is an integral part of our
supplier engagement process and a key initiative to support
collaboration with suppliers and drive decarbonisation in the
supply chain. The programme involves assessments and dialogue
around sustainability, and we engage with both mature suppliers
and those that are still starting out on their sustainability journeys.
Procurement Sustainability Screening is a maturity assessment
for decarbonisation and focuses on key topics across all of our
categories, from raw materials and packaging to logistics and
other services. Through the screening, we identify opportunities for
collaboration and emission reductions, and address the main drivers
of decarbonisation, such as energy management. Our goal is to
screen suppliers representing 70% of our total spend by 2025.
In 2024, Hempel Group Procurement screened 184 suppliers in six
different categories. In total, this brought the spend covered by the
screening to 61%. We also performed eight follow-up screenings
with low performing suppliers. Categories in focus this year included
raw materials and services, such as metallic, pigments and
consulting services.
The commercial impact on sustainability
To further encourage our suppliers’ sustainability efforts and
ambitions, we started implementing sustainability as part of our
commercial comparisons and tenders in 2024, using the maturity
score from Procurement Sustainability Screening as criteria.
During the year, we included sustainability in global tenders for
epoxy resins, titanium dioxide and zinc – some of the raw material
categories with the highest impact on our carbon footprint.
70%
Our goal is to engage with suppliers repre-
senting 70% of our total spend by 2025.
In 2024, we achieved 61%.
61%
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 30
Engaging with our
downstream value chain
Data and transparency: Empowering informed decisions
We provide data and transparency around our solutions so our
customers can make informed decisions to meet their sustainability
ambitions and deliver on reporting requirements. We are transparent
around our performance and sustainability efforts.
The Sustainability Product Scorecard is our primary tool for detailing
our product environmental footprint. The tool allows us to measure
and report on nine different environmental metrics, such as carbon
footprint, paint consumption, product hazard, and Volatile Organic
Compound (VOC) content, providing a clear and concise overview of a
product’s sustainability performance. We can also provide customers
with carbon reports that show the carbon footprint of a specific
project, coating system or coated asset.
Product development and innovation
In 2024, we further integrated sustainability into our product
development by implementing a robust benchmarking system.
This assessment considers a range of criteria, including carbon
footprint, hazardous materials and sustainable value creation for the
customer. This proactive approach ensures that sustainability remains
a central focus in our innovation efforts, driving us toward a more
sustainable assortment.
We took a significant step forward in our commitment to long-term
sustainable innovation in 2024 by establishing the Sustainable
Technologies Centre, at our state-of-the-art Innovation centre in
Denmark. The centre’s primary goal is to develop groundbreaking
technologies that address critical sustainability challenges, such as
transitioning to water-based formulations, enhancing the use of bio-
based and recycled materials, and reducing health and environmental
hazards. By integrating sustainability into our innovation process, we
are not only enhancing our product offerings with new and innovative
business models, but also ensuring that our solutions contribute
positively to the environment and our customers’ success by using
less paint. Because using less paint reduces VOC emissions and
carbon footprint, our innovation is heavily focused on this.
We also look to develop sustainable innovations outside of the can.
Using digital tools, robotics and automation, our in-house innovation
incubator, GrowHub, explores solutions focusing on critical areas,
such as packaging, application and surface preparation.
At Hempel’s Sustainable Technologies Centre, located
in our state-of-the-art Innovation centre in Denmark,
our colleagues develop groundbreaking technologies
that address critical sustainability challenges as part
of our commitment to long-term sustainable innovation.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 31
Social
Gender balance in leadership positions
We want to achieve 34% women in leadership
positions by 2027. We have reached our target of
31% in 2024 and are working towards 32% in 2025.
Gender balance in general workforce
Our long-term goal is to not exceed 60% representation
of one gender with a target of 37% women in general
workforce by 2027. In 2024, we reached our target of
34% and are working towards 35% in 2025.
We want to complete a five-year plan for reducing and
phasing out hazardous raw materials (measured in
kg/1,000L of paint produced). In 2024, our goal was to
achieve a reduction of 15% hazardous raw materials,
however we succeeded in achieving a 59% reduction.
Hazardous raw materials
We want to build an even stronger safety culture
and eliminate all Lost Time Accidents and other
injuries (measured in number/million work hours).
In 2024, we had 0.6 Lost Time Accidents.
Lost Time Accident frequency
People and safety are at the heart of
everything we do. This goes for our own
colleagues as well as people across
our value chain. By fostering safety,
fair labour practices, diversity and
inclusion, we aspire to drive positive
change and raise industry standards.
We have a strong focus on achieving
gender balance in our own operations
and reducing hazardous materials
that are harmful to people and the
environment.
31% 34%
- 59%
0.6
Sustainability targets
2021 2027
2024
2027 target: 34%
2024 target: 31% 2024 target: 34%
2027 target: 37%
2021 2027
2024 target: 0%
2022 2024
2024 target: - 15%
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 32
People in our own operations
We are committed to developing a diverse and inclusive culture
where our colleagues are safe, feel respected and are treated fairly.
We believe that ensuring equal rights and promoting diversity will
benefit all our colleagues around the world, fostering collaboration,
innovation and better business performance. Diversity, Equity and
Inclusion (DEI) are an integral part of our corporate strategy.
S1 Own Workforce: The health and safety of employees are our
top priority
As a manufacturing company that also serves customers in the field,
the health and safety of employees is our top priority in everything
we do. We continue to foster a safety culture to ensure we always
safeguard the health of employees and the partners we work with.
Our continuous focus on safety throughout 2024 led to a decrease
in Lost Time Accident (LTA) frequency from 1.77 per 1,000,000
working hours in 2023 to 0.6 per 1,000,000 working hours in 2024.
One accident is one too many and we will continue to raise the bar
on how we handle safety in and around our company for all people
working at or visiting our premises.
In 2024, we continued to strengthen our health and safety initiatives,
rolling out our Safety Leadership Programme globally across all our
factories and R&D centres. This resulted in a significant decrease in
reportable incidents and an increase in the reporting of improvement
ideas. In 2024, we hit our target of having at least two improvement
ideas raised by each full-time employee during the year. Our Safety
Leadership Programme uses a proactive approach to improve
competence and raise awareness of safety. The global roll out has
encouraged more safety ownership across all our sites, helping
ensure a more positive safety culture.
Achieving an equal gender balance
Gender balance across our workforce is another top priority, and our
long-term goal is to not exceed 60% representation of one gender.
In 2024, women made up 34% of our general workforce and 31% of
our leaders (defined as leaders with three or more direct reports).
We hereby met our 2024 target of 31% women in leadership positions
and are working towards a target of 32% in 2025.
As a starting point, we reinforced our talent acquisition strategies
in 2024 to drive gender balance in our recruitment processes and,
especially, to increase focus on attracting female candidates for
leadership and commercial positions. This included leveraging data
throughout the recruitment process in the ongoing collaboration
between our Talent Acquisition team and leaders across our company.
To truly understand which initiatives are required to ensure we
progress towards a gender-balanced workforce and reach our targets,
we conducted focus groups and our CEO hosted round table meetings
in 2024 to engage with and get input from female colleagues across
Hempel. We gathered feedback on the challenges that women in our
workforce face and discussed how we can turn ambition into action.
Based on these insights, we introduced a new global Parental Leave
Policy in 2024. The policy provides a minimum standard of leave with
expanded benefits for all colleagues in Hempel who are parents of
young children. The new policy aims to support all family types, giving
equal opportunities for colleagues building and nurturing their families.
In addition, the policy directly supports our DEI ambitions by allowing
us to attract, retain and engage more women in our workforce.
We also introduced a new global Flexible Working Policy in 2024.
We believe it is essential to provide individualised flexibility to our
colleagues as we all have differences in how we balance our personal
and professional lives. Offering individual flexibility, which does not
have to fit to an overall standard structure, empowers our employees
to manage their work schedule in the most effective manner. The policy
outlines options and expectations for managers and employees to
ensure as much flexibility as possible in different roles and situations.
In late 2024, our Women’s Network launched a global mentorship
programme for female colleagues. The purpose of the programme
is to create a supportive and inclusive environment that promotes
career development, with new learnings and insights for both our
mentors and their mentees.
Creating an inclusive workplace
We continued many of our existing programmes in the DEI sphere in
2024, integrating DEI into our talent acquisition and broader people
processes. We run Inclusive Leadership Training for our leaders,
and Anti-Harassment Training for all employees. With the support of
Hempel’s DEI Council, we create awareness among colleagues about
DEI topics and celebrate diversity initiatives, such as Neurodiversity
Celebration Week, International Women’s Day and World Pride.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 33
31%
of our leaders are women.
Our 2025 target is 32%
We strive to create a workplace where our colleagues feel welcome
and valued regardless of their background, demographics, beliefs
or preferences. In 2024, we also increased our focus on corporate
social responsibility and human rights as part of our overall ESG
framework. In 2025, we will work with our internal and external
stakeholders to develop and implement due diligence procedures in
compliance with international labour standards and human rights laws.
Learning and development for all
We are committed to supporting our employees on their professional
development journeys. We offer learning and development opportuni-
ties tailored to different stages of their professional careers.
A key offering is Hempel Academy, our global skills development
platform, that enables colleagues at all levels of the organisation to
access training 24/7 in multiple languages. Since its launch in 2023,
our colleagues have undertaken over 10,000 hours of self-initiated
learning. In 2024 alone, colleagues logged more than 4,000 hours
of self-learning, on topics such as project management, process
improvement, personal productivity and well-being. We also use
adaptive learning methods to develop foundational understanding
of paint technology and sustainability among all colleagues.
In addition, we run talent development training for three distinct
target groups to actively engage them in their own development and
help us build a strong pipeline of potential leaders.
Sustainability training for all
Sustainability underpins all our work and everyone in our organisation
plays a role in driving sustainability within Hempel and with our
customers. Our Sustainability Foundation eLearning helps colleagues
gain insights on different sustainability topics. In 2024, we rolled
out interactive training for commercial employees, to equip them
for the increasing demand from customers regarding sustainability
information and solutions. For colleagues in our production units and
warehouses, we offered in-person sustainability training sessions in
local languages, attended by more than 700 employees.
Reducing hazardous substances in our products
Our products are designed to protect our customers’ most valuable
assets from corrosion, prolonging their service life and reducing
costs and emissions associated with repair.
We have a responsibility to ensure the safety and well-being of
colleagues, applicators and end-users. We are committed to
minimising any risks associated with the development, production
and application of our coatings.
Our goal was to achieve a 15% reduction in hazardous raw material
intensity (kg/1,000L) by 2024 compared to our 2022 baseline.
We decreased the intensity of hazardous raw materials in our products
from 20.37 to 8.33 (kg/1,000L) of paint produced, significantly
exceeding our target.
Our efforts in this area are guided by our Hazardous Raw Material
Programme, which evaluates and prioritises raw materials based on
regulatory classifications and industry frameworks. The programme
gives us a structured approach for assessing materials, and guides
our R&D teams when developing safer alternatives and working with
Procurement to source substitute raw materials.
The definition of when a material falls under the Hazardous Raw
Material Programme is closely linked to the regulations. This implies
that any re-classification of materials causes additional raw materials
to fall under the Hazardous Raw Material Programme. The changes
in regulations in 2024 has caused the total hazardous raw material
consumption to increase to 62.61 (kg/1,000L). All hazardous raw
materials are evaluated and included in the programme, with the
overall goal of reducing the overall impact.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 34
People in our upstream
value chain
S2 Workers in the Value Chain: Sustainability risk management
in our supply chain
As a global enterprise, we acknowledge our responsibility to respect
human rights. We seek to prevent or mitigate adverse effects on
human rights directly linked to our operations, products or services,
and we expect our employees to do the same.
We are committed to respecting human rights in accordance with the
UN Global Compact and the UN Guiding Principles on Business and
Human Rights. This entails efforts to avoid and mitigate sustainability
risk in our supply chain. To this end, we use a sustainability assess-
ment performed by EcoVadis, an external provider of sustainability
evaluations. The assessment covers four key topics – labour and
human rights, environment, ethics and sustainable procurement –
and our strategic direct spend suppliers are expected to participate.
In 2024, 89% of our direct spend suppliers (by spend) were risk
assessed by EcoVadis, compared to 75% in 2023. In terms of
performance, 85.7% are compliant with Hempel’s expectations.
We implemented corrective actions with 47 suppliers and set up
close monitoring of potentially high-risk suppliers.
Additionally, we focused on continuous improvement of our human
rights due diligence processes. We participated in the Business &
Human Rights Accelerator, a six-month programme organised by
the UN Global Compact that activates companies participating in
the compact across industries and regions.
We also continued our active membership of the Nordic Business
Network for Human Rights. This is facilitated by the Danish Institute
for Human Rights, and provides a forum where businesses can
meet to share knowledge and learn from each other on how to
conduct and improve human rights due diligence in supply chains.
Conflict minerals
We monitor suppliers of conflict minerals (tin, tantalum, tungsten
and gold, also called 3TG) on an annual basis, as tin is used in
some of our packaging and some raw materials. Our due diligence
process, screening and reporting are based on guidelines from
the Responsible Minerals Initiative. In 2024, 98% of the scope was
covered by the screening.
*
Supplier sustainability performance
* In 2024, the Conflict Minerals Reporting Template (CMRT) was updated.
87% of the relevant spend is reported through this version. The remaining
2% is reported through the previous version.
89%
SUPPLIERS ASSESSED
BY ECOVADIS
98%
SUPPLIERS SCREENED FOR
CONFLICT MINERALS
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 35
Code of Conduct training
Number of Employee Code of Conduct trainings.
Employees are trained in anti-corruption, anti-
bribery, whistleblower policy
Whistleblower cases
Number of compliance cases during
the year.
Governance
Sustainability targets
Being a trusted partner to our
customers and other stakeholders
is a key lever in our strategy.
By upholding integrity, transparency,
and accountability in everything we do,
we not only build trust but also set a
benchmark for ethical conduct across
the industry.
EcoVadis screening
Promote and further good ethical behaviour
and environmental practices in our supply chain
2024
2024 target: 100%
99%
2024
56
89%
2024 target: 80%
2024
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 36
Our responsible
business ethics
We are committed to conducting our business in a responsible,
respectful and ethical way at all times, and we are proud to be
a trusted partner for our customers and business partners.
Our Employee Code of Conduct and Business Partner Code of Conduct
play a key role in guiding our work and engagements within our
company and with external stakeholders, ensuring that we navigate
complex business environments and situations in an ethical way.
They set our expectations to our employees and business partners
within the areas of human rights, labour rights, the environment and
anti-corruption.
G1 Business Conduct: The whistleblower reporting system
Our Ethics Hotline is an externally hosted whistleblower system that
enables any employee or external stakeholder to anonymously report
potentially irregular or unethical conduct through a secure reporting
portal. The system is an important tool to ensure that allegations of
irregular or unethical conduct are reported and addressed quickly.
All reports are treated confidentially and followed up with an objective
and independent investigation led by the Compliance function, which
recommends appropriate action to the Ethics Committee. The Ethics
Committee then approves how to handle reported issues and
decides on appropriate action following the investigation, including
disciplinary action if deemed necessary. The Ethics Committee
consists of the Hempel Group’s Chief Financial Officer, Chief People
& Culture Officer, Executive Vice President and Head of Decorative,
and General Counsel. Hempel’s Audit Committee receives regular
updates that summarise reported cases and case resolutions.
In 2024, Hempel had 56 new registered compliance cases from
20 countries, a 19% decrease compared to 2023, however
above Hempel’s five year average of 49 compliance cases and
reflects a healthy speak-up culture. Local transpositions of the EU
Whistleblower Directive have come into force in all EU countries, and
we have updated our procedures and communications as applicable
to further facilitate safe, confidential and accessible reporting.
G1 Business Conduct: Business ethics & data protection
Hempel’s zero tolerance for bribery and corruption is clearly described
in our Business Ethics Policy, which outlines procedures to counter
corruption, bribery and other unethical behaviour. In addition, anti-
bribery topics feature prominently in most of our regular compliance
initiatives, including management communications, the Employee Code
of Conduct and related 2024 refresher training, and the Business
Partner Code of Conduct.
In 2024, sanctions compliance was a focus area. We diligently
continued to work on ensuring that our employees and distributors
comply with the applicable sanctions. To this end, we have further
upgraded our sanctions screening capabilities and tools.
In the area of data protection, we continued to implement the
General Data Protection Regulation (GDPR) as a standard compliance
framework for all companies within the Hempel Group, with particular
focus on risk management and training. We are also preparing to
implement measures to comply with the upcoming EU Artificial
Intelligence Act (AI Act). In 2024, all Hempel PC users were assigned
online refresher training in privacy and data protection, as well as
AI awareness.
In order to ensure that all employees understand and uphold our
standards in their daily work, compliance training is delivered to all
new employees and is annually refreshed.
G1 Business Conduct: Leading on sustainable procurement
Hempel operates a complex global supply chain. To ensure we
maintain responsible business conduct throughout our supply chain
and achieve our sustainability ambitions, we engage and collaborate
extensively with our suppliers. We do this through our Sustainable
Procurement Programme.
We also have a Sustainable Procurement Policy in place that states
our commitment and approach to sustainability with our suppliers,
and how we turn our commitments into action. The policy outlines
the main principles for integrating sustainability practices into our
collaboration with suppliers. In 2024, we focused on implementing
the policy for direct spend suppliers.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 37
Training Content Target group
EMPLOYEE ONBOARDING TRAINING
Employee Code of Conduct,
Fundamentals
• Learn the fundamental concepts in Hempel’s Employee Code of Conduct and how
to raise concerns.
All new employees – PC users only
Sanctions and Export Controls,
Fundamentals
• Understand sanctions policy principles and understand trade restrictions involving
certain countries, certain parties, or certain economic sectors.
All new employees – PC users only
Fair Competition, Fundamentals
• Learn how to comply with antitrust laws and live by Hempel’s commitment to fair,
open and unrestricted competition.
All new employees in leadership positions plus all commercial and customer-facing roles
and other employees that meet competitor representatives as part of their usual duties
Benefits in the Marine Segment • Understand compliance in relation to the use of owner benefits, rebates, bonuses,
commissions and fees in the Marine segment.
All new employees in the Marine segment and those directly supporting the Marine segment
Data Protection and AI (GDPR & AI),
Fundamentals
• Understand basic data privacy (GDPR) and Artificial Intelligence (AI)
principles and understand how the rules apply to Hempel’s business.
All new employees – PCusers only
ANNUAL REFRESHER TRAINING
Annual Sanctions refresher • Apply and practice sanctions principles and understand restrictions regarding involving
certain countries, certain parties, or certain economic sectors.
Employees in leadership positions and PC users in higher risk functions or regions,
including commercial and customer-facing roles and commercial support functions
Annual Fair Competition refresher • Apply and practice how to comply with antitrust laws and live by Hempel’s commitment
to fair, open and unrestricted competition.
Employees in leadership positions plus all commercial and customer-facing roles and
other employees that meet competitor representatives as part of their usual duties
Annual Benefits in the Marine
Segment refresher
• Apply and practice how to comply with the concepts of owner benefits, rebates,
bonuses, commissions and fees in the Marine segment.
Employees in the Marine segment and those directly supporting the Marine segment
Annual Data Protection and AI
(GDPR & AI) refresher
• Apply and practice data privacy (GDPR) principles and understand how the rules apply
to Hempel’s business.
All employees – PC users only
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 38
Corporate
governance
→ Corporate governance
→ Board of Directors
→ Executive Group Management
→ Risk management
→ Tax
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 39
Corporate governance
Management structure
The Executive Group Management is led by the Chief Executive Officer
(CEO), who reports to the Board of Directors. The CEO oversees
Hempel’s organisational management structure, which is centered
around our Decorative, Marine and Energy & Infrastructure segments.
In 2024, our Technology & Operations function was split. In the
new structure, R&D, Procurement and Sustainability make up a
new function, Technology, while Operations is fully integrated within
the segments.
This new structure elevates innovation to the highest management
level of our company, recognising that it is a critical enabler of our
success and a key differentiator and qualifier in the eyes of our
customers. The Technology function is led by Emilie Barriau, Chief
Technology Officer (CTO) and Executive Vice President (EVP) of
Technology, who was appointed to the newly established role in 2024.
This enables R&D, Procurement and Sustainability to serve as mutually
reinforcing and interdependent powerhouses to drive innovation
together with customers, suppliers and partners. As illustrated
above, these changes are part of Hempel’s ambition to enhance
scalability and seek opportunities for synergy between the segments.
Our strong corporate governance framework is based on the
Articles of Association of Hempel A/S and applicable laws
and regulations, as well as internal policies and procedures.
It supports long-term value creation for our company, customers,
suppliers, employees and the communities in which we operate,
and promotes responsible and sustainable business behaviour.
Board of Directors
Hempel A/S has a two-tier management structure consisting of
the Board of Directors and the Executive Group Management.
The Board of Directors is responsible for the overall strategic
direction of Hempel A/S and must ensure the proper organisation
of the company’s business. It also supervises the execution of the
strategy, as well as the performance of the company. The Executive
Group Management is responsible for the day-to-day management
of the company. The two bodies are independent, and no one serves
as a member of both. The Board of Directors consists of seven
members elected for a one-year term by the shareholders at the
Annual General Meeting and three employee members elected for
a four-year term by the employees based in Denmark (the latest
election took place in 2023). The Board of Directors’ duties and
responsibilities are set out in its Rules of Procedure.
Composition and responsibilities of the Board of Directors
The Board of Directors includes both professional board members
and members with executive positions. As well as in-depth knowledge
of Hempel’s business, board members possess expertise within a
wide range of areas, from innovation, ESG & sustainability, product
development, marketing and commercialisation through to business
expansion, value growth, mergers & acquisitions and finance.
These diverse profiles ensure that the Board of Directors can operate
efficiently and support the Hempel Group’s strategy.
Decorative
Marine
CEO
CTO
Technology
CTIO
Digital, Strategy & Transformation
CPCO
People & Culture
CFO
Finance
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 40
Each year, the Board of Directors carries out a self-evaluation of its
competencies and skills. The evaluation is carried out systematically,
using clearly defined criteria to ensure the Board constantly improves
its own performance and its cooperation with the Executive Group
Management. The current composition of the Board of Directors
is deemed appropriate as it provides a good balance between
knowledge, competencies and experience. The Board of Directors
is responsible for safeguarding the interests of the shareholders,
while also considering all other stakeholders. On an annual basis,
the Board of Directors aligns its priorities and tasks with the
overall strategic direction and financial performance of the Hempel
Group. The Board of Directors also evaluates the Executive Group
Management on a continual basis.
Tasks managed by the Board of Directors in 2024
In 2024, the Board of Directors worked to refine the continued
execution of Hempel’s Double Impact strategy. This work focused
on driving profitable growth by establishing scalable operations,
overseeing value creation plans, and working with the Executive
Group Management to mitigate any financial impacts caused by
general macroeconomic uncertainty, while concurrently placing
significant emphasis on maintaining and improving sustainability
initiatives. In addition, the Board of Directors oversaw the process
of welcoming CVC Funds as a minority investor in Hempel A/S, which
was completed in August 2024. See Note 4.1 for more information.
The Board of Directors also supervised the divestment of the
J.W. Ostendorf and Renaulac businesses, also completed in
August 2024.
The Board of Directors has a continued strong focus on ESG and
sustainability and works to ensure that the Hempel Group at all times
exercises sound management with regards to environmental matters
and ESG. For this purpose, the Board was presented with several
ESG and sustainability updates throughout the year.
Meeting activity 2024
Board of Directors Audit Committee RemCo and NomCo*
4 March 1 October 29 February 23 September 28 February
28 April 14 November 3 June 29 November 14 August
17 June 11 December 4 December
Name Title Board of Directors Audit Committee RemCo and NomCo*
Richard Sand
4
Chair
Eric Alström
1
Deputy Chair
Søren P. Olesen Board member/Deputy Chair
Karsten Munk Knudsen Chair of the Audit Committee
Susanna Schneeberger
2
Board member
Britt Meelby Jensen
2, 4
Board member
Leif Jensen
4
Board member
Christoffer Sjøqvist
3
Board member
Michael Lavrysen
3
Board member
Helle Fiedler Elected by the employees
Vibeke Stendal Larsen Elected by the employees
Stephan Rolsted Elected by the employees
Attended meeting Absent from meeting
1
Eric Alström left the Board as of August 2024. Søren P. Olesen assumed the role of Deputy Chair.
2
Britt Meelby Jensen replaced Susanna Schneeberger on the Board as of May 2024.
3
Christoffer Sjøqvist and Michael Lavrysen joined the Board as of August 2024.
4
Not considered independent in accordance with recommendation 3.2.1 of the Danish Corporate
Governance recommendations.
* Remuneration and Nomination Committee.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 41
Diversity & inclusion
The Board of Directors believes that diversity strengthens any
governing body and acknowledges the importance of diversity in
general, including diversity of gender, nationality and competencies.
In 2024, neither of the two elected board members representing the
minority shareholder were female. As such, and despite its efforts
to enhance diversity, the Board of Directors’ target of having at least
33% female shareholder-elected board members by no later than
the Annual General Meeting in 2025 is not expected to be met.
Accordingly, the target remains to be reached by no later than the
Annual General Meeting 2030. Initiatives to reach the target include
establishing clear diversity goals and reviewing Board selection criteria
to broaden the candidate pool with qualified female candidates.
The Board remains committed to fostering an inclusive corporate
culture that values diverse perspectives and promotes gender
equality throughout the Hempel organisation. When it is considered
necessary to bring new competencies to the Board of Directors, or if
a member does not wish to continue serving, diversity is deliberately
taken into account when considering the profiles and qualifications
of potential candidates. In line with Hempel policies, qualified
representatives of both genders are always considered.
The Executive Group Management currently consists of three women
and five men. The group’s members are of four different nationalities.
More information on our initiatives to increase diversity and inclusion,
as well as relevant statistics for other management levels in Hempel,
can be found on pages 32-33 and 64.
Remuneration
Hempel offers its Board of Directors and Executive Group
Management remuneration that is competitive with industry peers
and other global companies with their headquarters in Denmark,
as this enables it to attract and retain competent and professional
business leaders and board members. Members of the Board of
Directors receive fixed remuneration and do not participate in any
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 42
incentive programmes. The remuneration of the Executive Group
Management consists of both a fixed salary and an annual cash
bonus, contingent upon financial targets and ESG targets, including
climate targets. The annual cash bonus cannot exceed 70-100%
of the individual’s fixed salary. The Board of Directors determines
annually whether to instigate new remuneration programmes and,
if so, the scope and objectives of these programmes.
The Executive Group Management has service and employment
agreements in line with market terms. Conditions for notice of
termination are determined individually for each member of the
Executive Group Management. The company has a general fixed
termination notice of 12 months if given by the company and six
months if given by a member of the Executive Group Management.
In 2024, the Company implemented a management incentive plan
whereby members of the Executive Group Management and certain
other senior managers were offered the opportunity to purchase
shares and warrants of the Company at fair value. As a condition to
entering into the programme, participants forfeited their long-term
cash-based incentive scheme, comprised of rolling three-year cash-
based bonus programmes. See note 2.2 for further information.
Board committees
The Board of Directors has established dedicated committees
to supervise and solve specific tasks. Currently, there are two
permanent committees: a Remuneration and Nomination Committee,
and an Audit Committee.
The Remuneration and Nomination Committee
The Remuneration and Nomination Committee assists the Board of
Directors with the recruitment of its executives. In addition, it assists
with the establishment of remuneration for the Hempel Group’s
executives and helps ensure that the Hempel Group’s general
remuneration policies are balanced, appropriately taking culture,
strategy and the external market into account.
Furthermore, the committee evaluates the Board of Directors
and the Executive Group Management each year and makes
recommendations to the Board of Directors in relation to the skills
that the Board of Directors and the Executive Group Management
must have to best perform their tasks. The committee also assists
the Board of Directors by selecting and proposing candidates for
executive positions, often with the assistance of a professional global
search firm. The committee convenes as necessary. However, it has
at least three fixed meetings during the year.
The Audit Committee
The Audit Committee’s work includes assisting the Board of Directors
with its oversight responsibilities for the financial and ESG reporting
process, the system of internal control including information security
controls, the risk management process, the internal and external
audit process, the process for monitoring compliance with laws and
regulations and Hempel’s Code of Conduct. The Audit Committee
reviews the annual report, ESG reporting, main accounting policies,
including significant accounting estimates and judgements, Treasury
Policy and Tax Policy. In addition, the Audit Committee has an
oversight role in relation to the whistleblower reporting system and
cases. The committee convenes as necessary. However, it has at
least four fixed meetings during the year.
Internal Audit function
The Internal Audit function provides independent and objective
assurance to the Board of Directors, Audit Committee and Executive
Group Management primarily within areas related to governance,
business ethics and internal control. It reports to the General Counsel
with dotted lines to the Hempel Group’s Chief Financial Officer and
the Audit Committee. The Head of Internal Audit acts as Secretary to
the Audit Committee, participates in all Audit Committee meetings
and meets separately with the Audit Committee at least once a year.
Internal Audit’s assessments and recommendations are reported
to relevant stakeholders, the Executive Group Management and the
Audit Committee. In accordance with its charter, the Audit Committee
annually assesses the need for an Internal Audit function. Based on
the recommendations of the Audit Committee, the Board of Directors
determines whether an Internal Audit function is required. The Board
of Directors’ assessment is that the Internal Audit function is required
and that its mandate and scope, processes in place, and planned
and performed activities are adequate to provide independent and
objective assurance.
Data Ethics Policy Statement, cf. section §99d
of the Danish Financial Statements Act
The Hempel Group is committed to responsible data practices and
ethical data management. A Data Ethics Policy is in place to ensure
that data is handled with care, in line with core ethical principles,
and in compliance with relevant regulations. This includes a focus on
data protection to safeguard personal information and ensure privacy
as well as data security. Hempel continuously seeks to improve its
approach to data management, ensuring that data is processed in a
responsible and secure manner across all areas of the business.
The Hempel Group’s Compliance function is responsible for over-
seeing compliance with the Data Ethics Policy, including relevant
initiatives to support policy compliance and development.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 43
Richard Sand
Chair
Søren P. Olesen
Deputy Chair
Leif Jensen
Board member
Britt Meelby Jensen
Board member
Karsten Munk Knudsen
Board member
Born 1959 1967 1954 1973 1971
First elected in 2009 (Chair since 2010) 2018 (Deputy Chair since 2024) 2011 2024 2021
Core capabilities • Foundation and company law, M&A
• Strategy development and execution
• ESG and Sustainability
• Industry knowledge
• Industry knowledge
• Product development
• M&A
• Industry knowledge
• Commercialisation through finance
• Business and leadership experience
from listed and private companies
• Industry knowledge from global
healthcare
• Commercial and strategy
development
• Finance
• ESG and Sustainability
Committees • Chair of Remuneration and
Nomination Committee
• Audit Committee member • Audit Committee member
• Remuneration and Nomination
Committee member
• N/A • Chair of Audit Committee
Selected positions
and directorships
• Partner at Poul Schmith/Kammer-
advokaten (since 1 July 2024)
with Right of Audience, The Danish
Supreme Court
• Chair: Aller A/S, Pressalit Holding A/S,
E. Callsen & Co. A/S and Kivan
Food A/S
• Board member: Aller Foundation and
Esplanadens Ejendomsselskab P/S
• CEO: STARK Group A/S
• Board member: Industriens
Arbejdsgivere i Danmark, IAD
• Chair: Strømberg Holding A/S
• Chair: Strømberg Ejemdomme A/S
• Board member: WindowMaster
International A/S
• CEO: Ambu A/S
• Board member: Novo Holdings A/S
• CFO and EVP Finance,
Legal & Global Solutions:
Novo Nordisk A/S
• Chair: NNE A/S
• Board member: 3shape Holding A/S
Education • Master of Law, University of
Copenhagen
• MSc Economics, Aalborg University
• MA (Econ), Rijksuniversiteit
Limburg, Maastricht
• MSc Economics and Management,
Aarhus University
• Cand. merc. International Marketing
and Management, Copenhagen
Business School
• MSc Finance, Aarhus University
Board of Directors
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 44
Michael Lavrysen
Board member
Christoffer Sjøqvist
Board member
Helle Fiedler
Elected by the employees
Stephan Rolsted
Elected by the employees
Vibeke Stendal Larsen
Elected by the employees
Born 1977 1976 1963 1971 1965
First elected in 2024 2024 2015 2023 2023
Core capabilities • Business expansion
• Investing in high-quality businesses
with longer growth horizons
• Business growth
• Value creation
• Product development
• Innovation
• Working environment
• Facility service management
• Working environment
• Product development and
performance
• Safety compliance
• Working environment
Committees • Audit Committee member • Remuneration and Nomination
Committee member
• N/A • N/A • N/A
Selected positions
and directorships
• Partner CVC
• Member of the CVC Strategic
Opportunities investment platform
• Partner CVC
• Head of CVC Denmark
• Lead Scientist R&D, Hempel A/S • Campus Service Manager,
Hempel A/S
• HSE & Compliance Manager,
Hempel A/S
Education • MSc Commercial Engineering,
KU Leuven
• MSc Accounting and Finance,
London School of Economics and
Political Science
• BSc Management, London School of
Economics and Political Science
• MSc Chemical Engineering
• Employee Board Member
certification
• Business school • Chemical technician
• Employee Board Member
certification
Board of Directors
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 45
Michael Hansen
Group President
& Chief Executive Officer
Peter la Cour Gormsen
Executive Vice President
& Chief Financial Officer
Ana Henriques
Executive Vice President,
Decorative
Alexander Enström
Executive Vice President,
Marine
Born 1975 1974 1983 1983
Core capabilities • Commercial
• Strategy development and execution
• Finance and IT
• M&A
• Commercial and marketing
• Portfolio management and strategy
• Commercial
• Industry knowledge
Education • Global Executive MBA,
IE Business School
• MSc in Finance,
Aarhus University
• MSc Marketing,
Northwestern University, Illinois
• MSc Material Chemistry,
Uppsala University
Executive Group
Management
Steen Niemann Madsen
Executive Vice President,
Energy & Infrastructure
Emilie Barriau
Executive Vice President
& Chief Technology Officer
Pernille Fritz Vilhelmsen
Executive Vice President
& Chief People & Culture Officer
René Overgaard Jensen
Executive Vice President & Chief
Transformation & Information Officer
Born 1971 1978 1980 1972
Core capabilities • Commercial and marketing
• Industry knowledge
• Technology and sustainable
innovation
• Science and chemistry
• People and HR
• Diversity, Equity and Inclusion
• Communication
• Strategy development and
execution
• Innovation
Education • Diploma in Business Administration,
Copenhagen Business School
• Ph.D. Polymer Chemistry, Mainz
University
• MSc Human Resource Management,
Birbeck University of London
• MBA Business Administration
and Management, Heriot-Watt
University, Edinburgh
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 46
Risk
management
Managing risks is key to creating the resilience
we need to successfully deliver on our strategy
and keep our organisation safe.
Effective risk management enables us to identify, evaluate and
manage uncertainties that could affect our ability to meet our
strategic objectives and value creation plans.
As a global company, we face a wide range of business opportunities
and risks. It is imperative that we ensure a robust and structured
approach to managing those risks. Our proactive approach to risk
management ensures the protection of our stakeholders’ interests,
supports informed decision-making and strengthens the long-term
resilience of our business.
In this section, we present our approach to managing risks, the key
risks that we have identified and how we address them.
Risk management in 2024
We strengthened our risk management practice in 2024 by updating
our Enterprise Risk Management Policy and providing further guidance
to our global organisation to enable us to conduct and facilitate risk
assessments locally. To ensure we remain resilient, we continued
our proactive approach to managing risks across all areas of the
organisation, including the undertaking of various risk assessments.
Geopolitical Risk Workshops
We conducted a series of Geopolitical Risk Work-
shops with key stakeholders from various func-
tions, including Operations, Procurement, Legal,
Compliance and our Logistics team. These work-
shops allowed for an in-depth analysis of the
various geopolitical risks that may impact Hempel
in the short, medium and long term. The workshops
fostered cross-functional collaboration, as well as
the development of mitigation strategies to safely
navigate the geopolitical environment that we are a
part of as a global company.
Risk Assessment Workshops
A risk assessment workshop was performed
together with our Risk Committee (consisting of our
Executive Group Management), focusing on key risks
to the Hempel Group. This exercise was instrumental
in aligning our understanding of the most critical
risks and how to approach them. In addition to the
overall risk workshop, we held risk workshops with
our individual segments to address the link between
our plans and strategic objectives for each segment.
The process will ensure that we take appropriate
actions to mitigate the identified risks in order to
reach our objectives.
Climate Change Risk Assessment
In recognition of the growing impact of climate
change, we conducted a comprehensive Climate
Change Risk Assessment focusing on our manu-
facturing footprint, as well as our top six suppliers.
The assessment will be used to prioritise sites
where we have a high exposure to climate change
risk. Based on the assessment, we will optimise
our production and products to mitigate potential
risks deriving from climate changes and ensure that
we are able to maintain quality and quantity when
facing climate change challenges, such as rising
global temperatures. This will allow us to build more
resilient business continuity management plans and
provide the necessary understanding of climate-
related vulnerabilities.
Double Materiality Assessment (DMA)
As part of the requirements in the Corporate
Sustainability Reporting Directive (CSRD), we com-
pleted our preliminary DMA to assess the financial
and non-financial impacts of the ESG risks that our
organisation faces. Please refer to pages 23-24
for more information on the DMA.
The above initiatives reflect our ongoing commitment to integrating risk management into the core of
our business to ensure that we are well-prepared to navigate future uncertainties and safeguard the
long-term success of Hempel. Aggregated key risks are described on pages 49-50.
During 2024, we focused on areas that will enable us
to drive our work within key topics. This included:
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 47
Enterprise Risk Management function
Assists and supports the EGM in fulfilling its
Enterprise Risk Management responsibilities.
Reviews and maintains the Enterprise Risk
Management framework and tools to ensure
their ongoing effectiveness.
Reports to the EGM/Risk Committee and Audit
Committee on key risks including emerging risks.
Compliance function
Provides guidance and expertise to segments
and functions.
Board of Directors / Audit Committee
Oversees the effectiveness of the Enterprise Risk Management programme.
Executive Group Management (EGM) / Risk Committee
Reviews and approves risk management governance, evaluates and approves
Hempel’s key risks and ensures the allocation of accountability of risks to risk sponsors.
Reports to the Audit Committee & Board of Directors on a bi-annual basis.
Risk Sponsors
Ensures that risk management processes are implemented in the segment/functional area.
Assesses, manages, and owns the risks and controls impacting the objectives
in the segment/functional area.
Risk Owners
Responsible for the assigned risks in the segments/functions,
and the design, implementation and monitoring of risk treatment plans.
Segments and functions
Decorative, Marine, Energy & Infrastructure, Digital,
Strategy & Transformation, Technology, Finance, People
& Culture (see governance structure on page 40).
Q3
Risk and strategy review
• Risk Committee meeting
Q1
Risk governance
• Risk Committee meeting
Q2
Mid-year risk review
• Risk Committee meeting
• Audit Committee meeting
• Board of Directors meeting
Q4
Annual risk review
• Risk Committee meeting
• Audit Committee meeting
• Board of Directors meeting
Annual Enterprise Risk Management Cycle
Enterprise Risk Management framework
The Board of Directors is ultimately responsible for the management
of risks and for deciding Hempel’s risk appetite. At least once a year,
the Board of Directors signs off on the key risks and ensures that
our governance is adequate vis-à-vis Enterprise Risk Management.
The Audit Committee assists the Board of Directors in overseeing
the effectiveness of our risk management system and monitoring
its performance.
The Risk Committee is responsible for signing off on key risks before
they are reported to the Audit Committee and Board of Directors.
The Risk Committee’s role is to assess and discuss the key business
risks that the organisation faces. Each key risk is assigned an
executive owner (Risk Sponsor), who is responsible for ensuring the
execution of the agreed risk treatment plans and bringing the risk
within the agreed risk appetite. Hempel’s annual risk management
activities are aligned to Hempel’s Annual Management Cycle
(see Enterprise Risk Management Cycle).
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 48
Macroeconomic Volatility
Our financial performance may be negatively impacted by
factors such as shifts in foreign policies, economic sanctions,
elevated energy costs, currency fluctuations, inflation and
increasing interest rates, which could drive major economies
into recession.
— RISK DRIVERS
• Market dynamics could impact raw material prices.
• An economic slowdown caused by higher unemployment rates and
sustained inflation could lead to a decline in consumer confidence,
impacting sales and profits.
• We may experience uneven performance as potential inflationary
recession leads to reduced growth and demand. Hempel’s customers
could delay their spend decisions if necessary price adjustments
impact their behaviour and willingness to pay.
+ MITIGATING ACTIONS
• We seek to minimise uneven performance risks through strategy
execution and financial planning.
• We have a balanced geographical presence, with revenue generated
from various regions, which helps to ensure a steady revenue.
• We hedge interest rates, assess currency developments and follow
strict financial planning on costs and cash.
• We ensure value-based price setting through our revenue manage-
ment programme.
Cyber Attack
Like other organisations, we are heavily dependent on a
robust digital infrastructure for e-commerce and data sharing
technology to conduct our day-to-day business activities and
serve our customers.
There is a constant threat of increasingly sophisticated
cyber-attacks, including phishing, ransom attacks and malware,
and in general attacks are becoming much more frequent.
— RISK DRIVERS
• Breaches of our infrastructure can lead to internal breaches or system
failure, which could in turn lead to the theft of personal data and
disruption to critical assets and our business in general.
• Malicious attempts to cause long-term damage to Hempel, our
customers, our suppliers and partners through unauthorised access,
destruction, corruption or manipulation of data could cause our
systems to be inaccessible for a period.
• Loss of proprietary information could cause financial impact and limit
our business opportunities.
+ MITIGATING ACTIONS
• We ensure an appropriate governance structure including future-
proofing and enhancing to protect our critical and sensitive data,
assets and reputation.
• We ensure regulatory compliance through various protection
mechanisms within our IT systems and business processes, as well as
company-wide internal audits of selected information security controls.
• We foster a culture of awareness around cybersecurity via employee
information security education and training (e.g., mandatory and
frequent e-learning).
• We ensure our Crisis Management team and Digital Disaster Recovery
organisation carry out structured annual exercises. During 2024, we
ran Cyber Incident Testing in our Crisis Management team.
• We strengthen and continuously update technical defences to mitigate
cyber risks by implementing various multi-layered security protocols.
Geopolitical Instability
With a footprint that stretches across the world, we are exposed
to global market forces and changes in government policies
and legislation, as well as increasing complexity in the regulatory
environment.
— RISK DRIVERS
• Geopolitical tensions could potentially drive up production costs.
• Trade tariffs along with export restrictions tied to national security, climate
change or human rights concerns, may add complexity to cross-border sales.
• Heightened geopolitical unrest may result in economic sanctions or
military conflict.
• Unintentional violations of sanctions could harm our brand and reputation.
+ MITIGATING ACTIONS
• We are minimising risks through diversification and maintaining a balanced
product portfolio across the Americas, EMEA, and APAC.
• We are using our global manufacturing presence to mitigate disruptions
and monitor risks closely in key markets, enabling us to swiftly adjust our
contingency plans.
• As our business expands, we proactively assess cross-border relations
and adapt to evolving public and private sector environments.
• We mitigate risks through robust sanction screening, export controls, and
a strong legal compliance framework.
• We completed scenario-based risk workshops to assess and build relevant
resilience strategies navigating the geopolitical landscape.
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 49
Hempel Annual Report 2024
Research & Development Innovation
To stay ahead of competition, we must ensure that research
and development remains a driving force for innovative product
development, while also mitigating the risk of disruptive technologies
and innovations from new and emerging competitors.
— RISK DRIVERS
• Our market position may be challenged if competitors develop new
products that better meet the future needs of our customers.
• Allocating insufficient research, development and product management
resources may cause delays in new product development.
• Hempel could miss our commitment to the Science Based Targets initiative
(SBTi) as we would be unable to provide an industry leading sustainable
product assortment.
+ MITIGATING ACTIONS
• We assess our innovation goals and product pipeline on an ongoing
basis to respond to new trends and translate them into key risks and
opportunities.
• We foster an innovative culture that prioritises our capacity to innovate
in order to deliver customer value from innovation and meet our
business goals.
• We closely monitor our strategic initiatives to ensure we remain focused
on delivering futureproof solutions that will help our customers across
our segments achieve their business goals, sustainability agendas and
ESG ambitions.
Supply Chain
Our manufacturing operations and global supply chain partners
are exposed to adverse risks, such as physical disruption,
cyber attacks, trade restrictions and climate change risks.
The loss of a critical supplier or multiple suppliers would
have a damaging impact on our ability to fulfil contractual
obligations and could ultimately impact our ability to serve
our customers.
— RISK DRIVERS
• Risk factors such as power supply disruption, raw material shortages
and trade restrictions can cause delay or non-delivery of critical raw
materials.
• Suppliers are exposed to cyber attacks and trade restrictions which
can limit the delivery of raw materials.
• Extreme weather events such as drought, high temperatures, floods
or storms can cause physical damage to critical suppliers’ locations.
• Potential regulatory changes can have an impact on our ability to
manufacture products in their current form.
• Climate action failure may change markets in which Hempel conducts
business activities or sources raw materials.
+ MITIGATING ACTIONS
• We seek to prevent disruptive risks through our operational risk
management approach, which includes a loss prevention risk
engineering programme.
• We review and assess interdependencies and back-up possibilities
across manufacturing sites to secure a steady production pipeline.
• We have implemented a business continuity management programme.
• We are driving a dual-sourcing strategy, whereby our
Procurement team constantly investigates and qualifies alternative
sourcing opportunities.
• We implement specific supply chain risk assessments, which also
include assessment of climate-related risks.
Climate Adaptation
Projections indicate that global warming of 1.5°C could be
reached or surpassed by the early 2030s. While the full scope
and effects of climate change are challenging to forecast,
Hempel is increasingly exposed to a broader range of climate-
related risks. We are aligning our risk assessment and reporting
practices with the guidelines set by the Taskforce on Climate-
related Financial Disclosures (TCFD), as outlined on page 67.
— RISK DRIVERS
• Potential regulatory risks associated with the shift to a low-carbon
emissions economy may impact government regulation and Hempel’s
ability to deliver on its strategic objectives.
• New legislation can have a significant impact on our ability to
manufacture products in their current form.
• Climate action failure may change markets in which Hempel conducts
business activities.
• As water sources may be depleted or disappear, the potential for
cross-border conflicts may intensify.
• Extreme weather conditions such as cyclones, tornados, hurricanes
and floods can cause disruption to our supply chain, challenging the
continuity of our business, which can lead to business interruption.
+ MITIGATING ACTIONS
• We assess the impact that climate-related risk can have on our
business, and we periodically carry out materiality assessments.
Hempel’s science-based targets are approved by the SBTi.
• We carried out an in-depth climate-change risk assessment across all
manufacturing sites and key critical suppliers. The assessment identi-
fied that certain sites are located in areas with an extreme climate-
change risk rating. We will allocate internal resources to address these
risks and ensure resilient strategies are maintained for these locations.
• We concluded our Double Materiality Assessment in 2024, identifying
the most significant ESG factors that influence both our financial
performance and our broader social impact.
• We assess and react to our fire and natural hazard reports, and work to
reduce the risk of losses by ensuring proper protection plans are in place.
• Investments to further mitigate risk form an integrated part of CAPEX
planning and prioritisation.
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 50
Hempel Annual Report 2024
Our approach to tax
As a global company with a revenue of EUR 2,185 million in 2024,
Hempel is subject to a diverse and complex global tax landscape.
Navigating different tax systems across numerous countries presents
challenges, especially in cross-border activities, as international
tax frameworks evolve. We participate in the dialogue about the
international tax system based on facts. Transparency in our tax
affairs is integral to this.
Tax governance
Hempel remains steadfast in its commitment to transparency and
accountability in tax matters. Ensuring full compliance with laws
and regulations across every jurisdiction in which we operate is
a priority, reflecting our dedication to being a responsible global
corporate citizen.
Our Tax Policy is centred on two core principles: Compliance and
Transparency. Established by Hempel’s Board of Directors, the
policy outlines the guidelines and expectations for managing
tax affairs across the Hempel Group. It applies to all directors,
managers and employees whose roles influence the management of
At Hempel, sustainability is a core component of our Double Impact
strategy, influencing not only our broader decision-making but also
our approach to tax. We recognise the crucial role taxes play in
supporting societal development by funding essential services,
such as education, healthcare and infrastructure.
taxes, and encompasses all forms of taxation – direct, indirect,
collected and borne. The Tax Policy is reviewed annually by
the Audit Committee and approved by the Board of Directors.
The policy is updated as necessary to ensure continued alignment
with our values. It is publicly accessible at hempel.com/about/
ethics-and-compliance.
Compliance
• We implement global policies and procedures to ensure
accurate tax reporting and timely payments.
• We adhere to both the letter and spirit of the law in all our
tax dealings.
• We engage only in transactions that have genuine
commercial substance.
• We ensure taxes are paid in the jurisdictions where value
is generated.
• We file tax returns in all required locations, in line with
local laws.
Total tax footprint in 2024
EUR million
106.6
137.4
76.1
1.5
Employee-related taxes
Income taxes
Product/sales taxes
Other taxes
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 51
2024 focus areas for tax
In 2024 we undertook multiple activities, including:
• Preparing systems for Pillar Two reporting as part of our readiness.
• Continuing focus on compliance data quality by setting up a Tax Data
Warehouse for VAT compliance purposes.
• Automating VAT processes.
• Implementing the principal model in more countries.
Pillar Two reporting
We continue to monitor the implementation of Pillar Two regulations
in local countries to ensure we comply with local requirements.
Only a limited number of countries have implemented specific local
rules, such as Qualifying Domestic Top Up Tax rules.
More details on Hempel’s financial exposure to Pillar Two can be
found in Note 2.4.
VAT compliance processes
In late 2024, we started implementation of a tax engine that will
automate the VAT determination of VAT transactions. The solution
will improve and streamline our VAT processes, prepare for real-time
reporting and significantly optimize our VAT compliance process.
Implementation of the principal model
As stated in our Tax Policy, we are transitioning into a so-called
principal model. Work on implementing the model accelerated during
2024 and the principal model was rolled out to several European
countries.
The model is aligned with the Organisation for Economic Co-operation
and Development’s (OECD) Transfer Pricing Guidelines and recognises
that our most valuable intangible assets (e.g. patents, knowhow,
trademarks and formulations) are centrally owned and controlled
by Hempel A/S in Denmark and consequently should be taxed
in Denmark. In addition, Hempel A/S also provides management
services to most of the entities in the Hempel Group.
Transparency
In line with our Futureproof sustainability framework and the
increased global focus on tax transparency, we are committed
to increased transparency around tax. Our Tax Policy is publicly
available, and we report on our global tax footprint. Our global tax
footprint for 2024 can be found on page 53.
We maintain a proactive and transparent relationship with tax
authorities, as set out in our Tax Policy:
• We act in a professional and courteous manner.
• We respond to the tax authorities’ inquiries in a timely
and transparent manner.
• Where appropriate and possible, we engage in early dialogue
with the tax authorities if significant uncertainties related to tax
matters apply to our business operations. We believe behaving in
this way will reduce the risk of disputes or damages to Hempel’s
credibility if uncertainties exist in tax regulations or if tax matters
are inadvertently incorrect.
Activity in low-tax jurisdictions or countries
categorised as tax havens
As a policy, Hempel is only active in countries where we have
commercial substance, and we do not set up companies in low or
no-tax jurisdictions for the primary purpose of minimising taxes.
We are present in Bahrain and the United Arab Emirates (UAE), which
are zero-tax jurisdictions. Hempel has a long-established presence in
both these countries, with production and sales companies in both
Bahrain and the UAE, with close to 200 employees in total.
Tax incentives received in 2024
As stated in our Tax Policy, the countries in which we do business
may offer tax incentives or preferential tax reliefs. Hempel only
accepts such incentives when these are specified in law and
generally available.
As an example, in 2024 and in line with previous years, Hempel made
use of the Danish R&D super-deduction and US R&D tax credits.
The costs qualifying for the super-deduction were incurred for R&D
in our R&D centres and for projects, to develop new and innovative
products for our portfolio.
Tax footprint
Hempel’s Tax Footprint is illustrated on the following page. The Tax
Footprint is based on the Total Tax Contribution Framework and
provides information on all taxes paid by Hempel.
The Framework is built around two essential criteria. First, the
definition of a tax and secondly, the distinction between taxes
that are the company’s costs (taxes borne) and income taxes that
the company collects on behalf of governments according to local
legislation (taxes collected).
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 52
Global tax footprint
44.6m
Tax borne
43.6m
Tax collected
APAC
The Americas
79.7m
Tax borne
131.8m
Tax collected
4.1m
Tax borne
17.3m
Tax collected
EMEA
Hempel Group
EUR million
321m
Global tax footprint
2,185m
Revenue
220m
Profit before tax
50m
Corporate tax accrued
76m
Corporate tax paid
7,200+
Employees
Employee-related taxes
Income taxes
Product/sales taxes
Other taxes
71.5m
0.7m
0.6m
47.8m
25.9m
92.0m 32.3m
29.4m
5.7m
2.4m
0.2m
EUR million
13.1m
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 53
Statements
→ Management’s statement
→ Independent auditor’s report
→ Independent limited assurance report on ESG data
Hempel Annual Report 2024
Financial statements
S
ustainability performance Corporate governance
ESGStatements
Our business
Introduction 54
Management’s
statement
The Board of Directors and the Executive Group Management have
today considered and adopted the Annual Report of Hempel A/S for
the financial year 1 January – 31 December 2024.
The Consolidated Financial Statements have been prepared in
accordance with IFRS Accounting Standards as adopted by the EU
and further requirements in the Danish Financial Statements Act, and
the Parent Company Financial Statements have been prepared in
accordance with the Danish Financial Statements Act. Management’s
Review has been prepared in accordance with the Danish Financial
Statements Act.
In our opinion, the Consolidated Financial Statements and the
Parent Company Financial Statements give a true and fair view of the
financial position at 31 December 2024 of the Group and the Parent
Company and of the results of the Group’s and Parent Company’s
operations and consolidated cash flows for the financial year
1 January – 31 December 2024.
In our opinion, Management’s Review includes a true and fair
account of the development in the operations and financial circum-
stances of the Group and the Parent Company, of the results for
the year and of the financial position of the Group and the Parent
Company as well as a description of the most significant risks and
elements of uncertainty facing the Group and the Parent Company.
In our opinion, the ESG data and information have been prepared
in accordance with the accounting policies applied. They give a fair
presentation of Hempel’s environmental, social and governance
performance. We recommend that the Annual Report be adopted
at the Annual General Meeting.
Kgs. Lyngby, 4 March 2025
Registered Executive Management
Board of Directors
Michael Hansen
Group President
& Chief Executive Officer
Peter la Cour Gormsen
Executive Vice President
& Chief Financial Officer
Richard Sand
Chair
Søren P. Olesen
Deputy Chair
Leif Jensen Britt Meelby Jensen
Karsten Munk Knudsen Michael Lavrysen
Helle Fiedler
Stephan Rolsted Vibeke Stendal Larsen
Christoffer Sjøqvist
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 55
Independent
auditor’s report
To the Shareholders of Hempel A/S
OPINION
In our opinion, the Consolidated Financial Statements (pages
71-112) give a true and fair view of the Group’s financial position at
31 December 2024 and of the results of the Group’s operations and
cash flows for the financial year 1 January to 31 December 2024 in
accordance with IFRS Accounting Standards as adopted by the EU
and further requirements in the Danish Financial Statements Act.
Moreover, in our opinion, the Parent Company Financial Statements
(pages 113-122) give a true and fair view of the Parent Company’s
financial position at 31 December 2024 and of the results of the
Parent Company’s operations for the financial year 1 January to
31 December 2024 in accordance with the Danish Financial State-
ments Act.
We have audited the Consolidated Financial Statements and the
Parent Company Financial Statements of Hempel A/S for the finan-
cial year 1 January – 31 December 2024, which comprise income
statement, balance sheet, statement of changes in equity and
notes, including material accounting policy information, for both the
Group and the Parent Company, as well as statement of compre-
hensive income and cash flow statement for the Group (“financial
statements”).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on
Auditing (ISAs) and the additional requirements applicable in Denmark.
Our responsibilities under those standards and requirements are
further described in the “Auditor’s Responsibilities for the Audit of
the Financial Statements” section of our report. We are independent
of the Group in accordance with the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional
Accountants (IESBA Code) and the additional ethical requirements
applicable in Denmark, and we have fulfilled our other ethical respon-
sibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
STATEMENT ON MANAGEMENT’S REVIEW
Management is responsible for Management’s Review (pages 1-53
and 61-68).
Our opinion on the financial statements does not cover Management’s
Review, and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our respon-
sibility is to read Management’s Review and, in doing so, consider
whether Management’s Review is materially inconsistent with the
financial statements or our knowledge obtained during the audit, or
otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether Management’s
Review provides the information required under the Danish Financial
Statements Act.
Based on the work we have performed, in our view, Management’s
Review is in accordance with the Consolidated Financial Statements
and the Parent Company Financial Statements and has been pre-
pared in accordance with the requirements of the Danish Financial
Statement Act. We did not identify any material misstatement in
Management’s Review.
MANAGEMENT’S RESPONSIBILITIES FOR THE FINANCIAL
STATEMENTS
Management is responsible for the preparation of Consolidated
Financial Statements that give a true and fair view in accordance with
IFRS Accounting Standards as adopted by the EU and further require-
ments in the Danish Financial Statements Act and for the preparation
of Parent Company Financial Statements that give a true and fair
view in accordance with the Danish Financial Statements Act, and
for such internal control as Management determines is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 56
In preparing the financial statements, Management is responsible for
assessing the Group’s and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
in preparing the financial statements unless Management either
intends to liquidate the Group or the Parent Company or to cease
operations, or has no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINAN-
CIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assur-
ance, but is not a guarantee that an audit conducted in accordance
with ISAs and the additional requirements applicable in Denmark
will always detect a material misstatement when it exists. Misstate-
ments can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit conducted in accordance with ISAs and the addi-
tional requirements applicable in Denmark, we exercise professional
judgement and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error as
fraud may involve collusion, forgery, intentional omissions, mis-
representations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group’s and the Parent Company’s
internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by Management.
• Conclude on the appropriateness of Management’s use of the going
concern basis of accounting in preparing the financial statements
and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast sig-
nificant doubt on the Group’s and the Parent Company’s ability to
continue as a going concern. If we conclude that a material uncer-
tainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such dis-
closures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group
and the Parent Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and contents of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events in a manner that gives a true and fair view.
• Plan and perform the group audit to obtain sufficient appropriate
audit evidence regarding the financial information of the entities or
business units within the group as a basis for forming an opinion
on the Consolidated Financial Statements and the Parent Company
Financial Statements. We are responsible for the direction, super-
vision and review of the audit work performed for purposes of the
group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Hellerup, 4 March 2025
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33771231
Anders Stig Lauritsen
State Authorised Public Accountant
mne32800
Kristian Pedersen
State Authorised Public Accountant
mne35412
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 57
Independent limited
assurance report on
the ESG data 2024
To the Stakeholders of Hempel A/S
Hempel A/S (Hempel) engaged us to provide limited assurance
on the ESG data for the period 1 January – 31 December 2024 on
pages 61-66 in the Annual Report for Hempel for 2024.
OUR CONCLUSION
Based on the procedures we performed and the evidence we obtained,
nothing has come to our attention that causes us to believe that the
ESG Data on pages 61-66 in the Hempel Annual Report 2024 have
not been prepared, in all material respects, in accordance with the
ESG Accounting Policies stated on pages 61-66.
This conclusion is to be read in the context of what we say in the
remainder of our report.
WHAT WE ARE ASSURING
The scope of our work was limited to assurance over the ESG Data
on pages 61-66 in Hempel’s Annual Report.
PROFESSIONAL STANDARDS APPLIED AND LEVEL OF
ASSURANCE
We performed a limited assurance engagement in accordance with
International Standard on Assurance Engagements 3000 (Revised)
‘Assurance Engagements other than Audits and Reviews of Historical
Financial Information’ and, in respect of the greenhouse gas emis-
sions stated on pages 62-63, in accordance with International
Standard on Assurance Engagements 3410 ‘Assurance engagements
on greenhouse gas statements’, issued by the International Auditing
and Assurance Standards Board. Quantification of greenhouse gas
emissions is subject to inherent uncertainty because of incomplete
scientific knowledge used to determine emissions factors and the
values needed to combine emissions of different gases.
A limited assurance engagement is substantially less in scope than
a reasonable assurance engagement in relation to both the risk
assessment procedures, including an understanding of internal
control, and the procedures performed in response to the assessed
risks; consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance
that would have been obtained had a reasonable assurance
engagement been performed.
OUR INDEPENDENCE AND QUALITY CONTROL
We have complied with the independence requirements and other
ethical requirements in the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants
(IESBA Code), which is founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality
and professional behaviour and ethical requirements applicable in
Denmark.
PricewaterhouseCoopers applies International Standard on Quality
Management 1, ISQM 1, which requires the firm to design, implement
and operate a system of quality management including policies or
procedures regarding compliance with ethical requirements, profes-
sional standards and applicable legal and regulatory requirements.
Our work was carried out by an independent multidisciplinary team
with experience in sustainability reporting and assurance.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 58
Hellerup, 4 March 2025
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no. 33771231
Anders Stig Lauritsen
State Authorised Public Accountant
mne32800
Kristian Pedersen
State Authorised Public Accountant
mne35412
UNDERSTANDING REPORTING AND MEASUREMENT
METHODOLOGIES
The ESG Data needs to be read and understood together with the
ESG accounting policies (pages 61-66), which management of Hempel
is solely responsible for selecting and applying. The absence of a
significant body of established practice on which to draw to evaluate
and measure non-financial information allows for different, but
acceptable, measurement techniques and can affect comparability
between entities and over time.
WORK PERFORMED
We are required to plan and perform our work in order to consider
the risk of material misstatement of the ESG Data. In doing so, we:
• Conducted interviews with data owners to understand the key
processes and controls for reporting site performance data;
• Obtained an understanding of the key processes and controls
for measuring, recording and reporting the ESG Data;
• On a sample test basis agreed and reconciled reported data to
underlying documentation;
• Performed analysis of data from reporting sites, selected based
on risk and materiality to the Group; and
• Evaluated the evidence obtained.
MANAGEMENT’S RESPONSIBILITIES
Hempel’s management are responsible for:
• Designing, implementing and maintaining internal controls over
information relevant to the preparation of the ESG Data that are
free from material misstatement, whether due to fraud or error;
• Establishing objective accounting policies for preparing the
ESG Data;
• Measuring and reporting the ESG Data based on the accounting
policies and the content of the ESG Data.
OUR RESPONSIBILITY
We are responsible for:
• Planning and performing the engagement to obtain limited
assurance about whether the ESG Data are free from material
misstatement, and are prepared, in all material respects, in
accordance with the ESG accounting policies;
• Forming an independent conclusion, based on the procedures
we have performed, and the evidence obtained; and
• Reporting our conclusion to the stakeholders of Hempel A/S.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 59
ESG
→ ESG data & accounting policies
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 60
ESG data &
accounting policies
Basis for preparation
The environmental, social and governance (ESG) data disclosed in this
section is prepared based on guidance from the UN Global Compact,
recommendations from the CFA Society Denmark, GHG protocol
and the metrics most relevant and material to the Hempel Group.
The conversion of data reported to CO
2
equivalents is completed by
applying relevant conversion factors from widely accepted authorities,
such as the UK Department for Energy Security and Net Zero (DESNZ).
The consolidation principles are based on the same consolidation
principles and period as the financial statements unless other-
wise stated. Data from entities acquired or divested are included/
excluded as of the date of the acquisition/divestment defined as
the date Hempel obtains or ceases control, unless determined
otherwise. If a divestment is financially classified as discontinued
operations the entities are excluded from current year figures and
comparative figures.
The accounting policies set out in this section have been applied
consistently in the preparation of the consolidated ESG data and
related disclosures for all the years presented.
Estimates & judgements
In preparing the ESG data, management is required to make judge-
ments, estimates and assumptions that affect the amounts reported.
The estimates and assumptions are based on experience, external
sources and various other factors that management considers to
be reasonable under the given circumstances. In general, carbon
footprint scope 3 emissions have a higher degree of judgement and
complexity, and changes in the assumptions and estimates could
result in different outcomes than those recorded and presented in
the scope 3 emissions.
Reporting scope
Environmental KPIs include Hempel Group data from all sites with
production or warehouses in which Hempel has operational control.
This includes 26 factories (2023: 26), 14 Innovation centres (2023:
14) and 25 warehouses (2023: 26) referred to as ‘Hempel sites
’.
In 2024, Hempel’s reporting scope was revised to reflect the
completion of the sale of the Hempel’s decorative business in Germany
and France on 1 August 2024. This divestment supports Hempel’s
strategic emphasis on strengthening its branded decorative business.
2023 figures have been restated to reflect the classification as a
discontinued operation of Hempel’s decorative business in Germany
and France according to the financial consolidation principles.
Additionally, in line with Hempel’s commitment to accurate accounting,
the Carbon Footprint calculations have been updated. The revisions
encompass:
• Updated to a more representative emission factor where relevant
• Restatement of data where applicable due to improved
information visibility
• Expansion of categories under scope 1, 2, and 3 emissions
• Broadened reporting boundaries, see next page for further details
The same update and restatement has been made to the 2019
baseline.
In 2023, Hempel’s scope, compared to previous years, was broadened
to include emissions from company vehicles under scope 1, as well as
the new factory in Zhangjiagang, China.
In 2024 retail stores and offices have been included, previously it
has been deemed immaterial, however with the significant decrease
in scope 1 and 2 emissions in our production sites, the relative
impact from the offices and retail stores has increased and the data
is hence collected and included.
All warehouses not under Hempel’s operational control (e.g. con-
signment warehouses and third-party handled warehouses) are now
included in scope 3.
Emissions from production, warehouses, retail stores and offices,
company vehicles, purchase of raw and packaging materials, energy
consumption for surface preparation and Volatile Organic Compounds
in produced products cover all material activities in Hempel’s value
chain. Emissions from production at toll manufacturing sites on behalf
of Hempel are included under the assumption that one tonne of toll-
produced goods requires the same energy and results in the same
waste generation as if the products had been produced at Hempel sites
(i.e., the impact of these third-party emissions is estimated using the
Hempel average material, energy, and waste impacts per litre of paint).
The social and governance data covers the Hempel Group, comprising
Hempel A/S and entities controlled by Hempel A/S unless otherwise
stated in the accounting policy.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 61
All environmental data are presented in absolute numbers, as well as relative to
production. The intensity data are given as the absolute data per 1,000 litres of
paint produced.
Energy (kWh)
Energy consumption is defined as the energy used at Hempel sites and company
vehicles and includes the amount of electricity, fuel, refrigerant top-up, district
heating and gas consumption.
Electricity consumption at Hempel sites is calculated based primarily on readings
from power managers and invoices, and adjusted to account for the reporting
period. Electricity is classified according to source as either renewable, non-
renewable or renewable energy through electricity bought with renewable energy
certificates (RECs). Classification is based on the energy’s source of origin,
applying generally accepted definitions.
Waste generation (tonnes)
Waste generation includes amounts in tonnes of disposed waste, based on
waste volumes collected by third-party waste handling providers. All waste gen-
erated is categorised by disposal method. Waste disposed through landfill is
separately disclosed.
Carbon footprint scope 1 (tonnes CO
2
e)
Scope 1 covers direct emissions originating from Hempel sites and company
vehicles. Scope 1 emissions (operational) are based on energy consumed in the
form of fuel used in operations (fuel oils and natural gas) as well as refrigerants
(top-up). The total scope 1 emissions consists of the operational scope 1 emis-
sions as well as the fuel from company vehicles. The consumption of fuels is
converted to CO
2
e emissions by applying relevant Greenhouse Gas Conversion
Factors for Company Reporting from the Department for Energy Security and Net
Zero (DESNZ, previously DEFRA) for the relevant year.
Carbon footprint scope 2 (tonnes CO
2
e)
Scope 2 covers indirect emissions from electricity and district heating consumed
at Hempel sites. The consumption of electricity and district heating is converted
to CO
2
e by applying the relevant emission factors (market or location based).
Sites using documented renewable electricity contribute with zero emissions
in the market-based approach. Electricity supplied through use of renewable
Environmental data
Energy & Waste 2024 2023
Renewable energy (kWh) 30,087,944 22,637,322
Renewable energy through use of RECs (kWh) 33,180,573 22,873,014
Non-renewable energy (kWh) 68,952,908 84,757,252
Total energy consumption (kWh) 132,221,425 1 30,267, 588
Share of renewable energy 48% 35%
Share of renewable electricity 83% 67%
Energy (kWh / 1,000 L paint produced) 348 384
Waste generation (tonnes) 22,398 16,202
Waste generation (kg / 1,000 L paint produced) 59 48
Waste to landfill (tonnes) 1,586 934
Waste to landfill (kg / 1,000 L paint produced) 4 3
% reduction of waste to landfill from production sites (Baseline: 2019) - 97% - 95%
Carbon footprint 2024 2023
Carbon footprint scope 1 (tonnes CO
2
e) Total 11,267 12,913
Carbon footprint scope 1 (tonnes CO
2
e) Operational 6,553 7,516
Carbon footprint scope 2 (tonnes CO
2
e) Location based 34,360 31,750
Carbon footprint scope 2 (tonnes CO
2
e) Market based 7,50 0 12,059
Carbon footprint scope 3 (tonnes CO
2
e) Total 2,822,684 3,000,090
Carbon footprint scope 3 (tonnes CO
2
e) SBT 2,241,899 2,375,494
% reduction in absolute CO
2
e emissions for scope 1 & 2 (Baseline: 2019) - 65%
*
- 54%
Carbon footprint scope 1 (tonnes CO
2
e / 1,000 L paint produced) 0.03 0.04
Carbon footprint scope 2 (tonnes CO
2
e / 1,000 L paint produced) Location based 0.09 0.09
Carbon footprint scope 2 (tonnes CO
2
e / 1,000 L paint produced) Market based 0.02 0.04
Carbon footprint scope 3 (tonnes CO
2
e / 1,000 L paint produced) 7.05 7.35
* Excluding company vehicles we reached a reduction of 70% in Scope 1&2.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 62
Category 4: Upstream transportation and distribution
This category includes emissions from the transportation and distribution of
raw materials, transportation of packaging as well as products to customers,
that are not transported by Hempel owned or controlled vehicles. Emissions
in this category are calculated based on data on distances converted to CO
2
e
using factors from DESNZ.
Category 5: Waste generated in operations
The calculation of CO
2
e from waste generation is based on updated emission
factors from the EcoInvent database, replacing the previous DEFRA factors
which only covered transportation emissions to treatment facilities. The revised
approach includes emissions from various waste management processes, such
as incineration, landfill, and recycling, accounting for transportation and specific
treatment emissions.
Category 6: Business travel
A hybrid approach is used for business travel emissions. The distance-based
method is applied for business air travel using data provided by Hempel’s
travel agency. Business Travel by Air with Radiative Forcing emission factors
are used from the factors from DESNZ. The spend-based calculation principle
is deployed for terrestrial business travel by taxi, rental car and train, and
converted to CO
2
e using DEFRA indirect emission factors.
Category 7: Employee commuting
This category contains emissions from the transportation of employees between
their homes and their worksites, as well as the energy used for working outside
the office – while traveling and from home. The average-data method is applied
to estimate the emissions from employee commuting based on the national
average commuting patterns.
Category 9: Downstream transportation and distribution
This category contains emissions related to product distribution from our
customers’ delivery locations to their retail stores. Additionally, this category
accounts for energy used in our non-operational-controlled warehouses.
A distance-based approach is used for the transportation emissions, and
converted to CO
2
e using factors from DESNZ. The energy consumption is based
on the footprint of our operational control warehouses, and is extrapolated
based on the area of the non-operational control warehouse that is occupied
by Hempel.
Category 11: Use of sold products
This category covers direct use-phase emissions (VOC emitted from products),
as well as indirect use-phase emissions (energy used in surface preparation and
application of products).
Volatile Organic Compounds (VOCs) in products
The calculation of CO
2
e from VOCs in products is based on the amounts of VOC
in products sold (i.e. grams per litre of product sold). All VOCs are converted to
carbon dioxide equivalent emissions using xylene as a representative profile.
Energy for application of products
The volume of sold paint is calculated based on actual production and sales
data. The data are split per country and recommended product application
method. The relevant country-specific emission factor (IEA dataset) is utilised
to determine energy consumption for each country. To account for surface
preparation, an average coverage of the sold products is calculated based on
products supplied. The CO
2
e is calculated by applying an estimated abrasive
blasting emission factor (kg CO
2
e/m
2
).
Category 12: End of life treatment
The waste-type specific method is applied to the total volumes produced at
Hempel sites and at third-party toll manufacturing sites. Waste specific method
is applied for this category. End of life emissions include the paint that is coated
on an asset at its end of life, as well as the packaging of the paint product. At the
end of life of the asset, it is assumed that the coating will not be removed prior
to destruction, and the treatment methods are estimated based on DEFRA
waste statistics. Packaging is split between plastic and metal, assuming that
all packaging material can be recycled.
The following categories were deemed insignificant or not relevant for Hempel:
Category 8: Upstream leased assets; Category 10: Processing of sold products;
Category 13: Downstream leased assets; Category 14: Franchises; Category 15:
Investments.
certificates is, in the market-based approach, deducted in accordance with
the guiding principles provided by RE100.
Carbon footprint scope 3 (tonnes CO
2
e)
Scope 3 covers all relevant categories in the Greenhouse Gas Protocol.
The emission factors used to convert to CO
2
e are from the following datasets:
• Ecoinvent 3.4
• Raw materials LCI database for the European coatings and printing ink
industries (CEPE database)
• Department for Energy Security and Net Zero (DESNZ) (previously DEFRA,
2024 v.1.1)
• Intergovernmental Panel on Climate Change (IPCC) (2013)
• DEFRA input/output emission factors for indirect supply chain emissions
(2020 v.1) (DEFRA indirect)
• DEFRA Recovery Rate from Non-Hazardous Construction and Demolition
Waste for the UK and England (2020) (DEFRA waste)
• CaDI Greenhouse Gas Emissions Factors for International Grid Electricity
(calculated from fuel mix) (2024)
Category 1: Purchased goods and services
A hybrid approach is used for purchased good and service emissions whereas
for office supplies, incidentals, purchased water and non-paint items a spend-
based approach is used. Spend data is converted to CO
2
e using DEFRA indirect
emission factors. The Subcategories packaging and raw materials use an
average-data approach. The calculation of CO
2
e from materials used in Hempel’s
production based on the type and amount consumed during the year, with
relevant conversion factors from the CEPE database or Ecoinvent 3.4 applied.
For packaging, CO
2
e is calculated based on volumes purchased by material type,
with conversion factors from DESNZ used.
Category 2: Capital goods
A spend-based calculation method is applied to this category. The spend data
are converted to CO
2
e using DEFRA indirect conversion factors.
Category 3: Indirect energy
This category includes emissions from three activities: upstream emissions
from purchased fuels; upstream emissions from purchased electricity; and
transmission and distribution (T&D) losses. The detailed information from scope 1
and 2 emissions is converted to scope 3 emissions using factors from DESNZ.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 63
Social data
Lost Time Accident frequency
We use Lost Time Accidents (LTAs) as a key measure of workplace safety. LTA
frequency is calculated as the number of LTAs per one million working hours.
LTAs are defined as occupational accidents that result in at least one day’s
absence following the day of the accident, as recommended by a medical
professional. Days such as weekends, holidays and vacation are included.
If the employee goes to work, even though a licensed healthcare professional
advises not to, the accident will be reported as an LTA. Similarly, if the employee
stays away from work without recommendation from a licensed healthcare
professional, it is not included.
Only accidents involving employees employed directly or supervised by Hempel
are reported. The number of working hours used to calculate the LTA frequency
is based on the number of average full-time employees working for Hempel,
multiplied by the most recent OECD average for actual working hours of 1,692
hours per employee per year (2023: 1,752 hours).
Consumption of hazardous raw materials
Hazardous raw materials are a subset of raw materials used in Hempel’s pro-
duction, which is monitored and compiled based on formulations and production
data for specific products. The volume of paint produced includes all products
produced by and for the Hempel Group, including products with no red raw
material consumption.
A raw material falls under the Hazardous Raw Materials Programme if it carries
any of the following hazard classifications according to the UN’s Globally
Harmonised System of Classification and Labelling:
• Carcinogen mutagen reprotoxic (CMR) category 1A or 1B
• Acute toxic category 1, 2 or 3
• Respiratory sensitisers category 1, 1A or 1B
Health & Safety 2024 2023
Lost Time Accident frequency (number/million work hours) 0.60 1.77
Consumption of hazardous raw materials (kg /1,000 L paint
produced) Total 62.61 55.40
Consumption of hazardous raw materials (kg/1,000L paint
produced) 2022 baseline 8.33 17.04
Or if the raw material has the following properties:
• Persistent, bioaccumulative and/or toxic chemicals (PBT) or very persistent,
very bioaccumulative (vPvB)
• Endocrine (hormonal) disruptors
Or is listed on the Registration, Evaluation, Authorisation and Restriction of
Chemicals (REACH) Candidate list or Authorisation list (Annex XIV).
The list of raw materials is reviewed and updated on a frequent basis, and our
approach for reducing the amount of hazardous substances is split between
two tracks: Substitution and Major Category Challenge. The Substitution track
focuses on replacing existing raw materials with a less hazardous alternative,
while the Major Category Challenge track focuses on long-term plans for some
of the main ingredients in our paint products, resulting in position papers and
overall business guidance related to the specific chemistry type.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 64
People & Diversity data
Headcount is defined as all individuals working directly for Hempel on a permanent
or temporary contract at the end of the relevant year. Average Full-Time Equivalents
(FTEs) is equal to the average number of full-time employees contracted with
Hempel. Part-time employees are converted into FTEs proportionally based on
the relevant country norm of a full-time employee.
Diversity KPIs are calculated based on the headcount at the end of the reporting
period, using the following definitions:
• Total workforce is individuals on either a permanent or temporary contract
with Hempel
• All management positions are defined as managers with at least 3 direct
reports (previous definition)
Less than 0.5% of our employees have omitted to disclose whether they identify
as male or female and therefore are not visible in the table on the right. However,
internally all employees regardless of gender are given equal weight.
Employee Engagement – Response rate
Hempel conducts a comprehensive employee engagement survey once a year
and all directly employed employees are invited to participate. The response rate
is calculated as the number of employees who have responded to the full survey
out of the total number of employees at the deadline for completing the survey.
Employee Engagement – Satisfaction & Motivation
and Learning & Development
The Satisfaction & Motivation and Learning & Development scores are based
on several questions included in the employee engagement survey. Answers are
given on a scale from 1 to 10 (with 10 being the highest) and are subsequently
converted to index figures on a scale from 0 to 100 by an external provider.
Employee engagement 2024 2023
Response rate 85% 84%
Satisfaction & Motivation 74 75
Learning & Development 81 81
People 2024 2023
Average full-time equivalents (FTEs) 6,932 6,788
Number of employees (headcount) 7,239 7,0 36
Diversity 2024 2023 Target for
the under-
represented
gender
Total
Ratio
female/male Total
Ratio
female/male
General workforce (total headcount per 31 Dec) 7,239 34/66 7,036 33/67 35% in 2025
(34% in 2024)
Leadership positions (3 directreports per 31 Dec) 911 31/69 890 29/71 32% in 2025
(31% in 2024)
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 65
Governance data
Percentage of employees required to complete the Code of Conduct refresher
The percentage is calculated as the number of employees who completed and
signed off on the annual Code of Conduct Refresher e-learning in Hempel’s
Learning Management System out of the total target group, consisting of over
4,000 employees.
Compliance cases
The number of compliance cases includes all cases that are recorded in our
Hempel Ethics Hotline system, operated by NAVEX Global, and handled in
accordance with Hempel’s Ethics Hotline Policy. Such cases may have been
submitted directly to the Ethics Hotline website, reported to our Compliance
function or management, or registered following an internal finding.
Hempel Procurement Sustainability Screening Programme
The number of suppliers screened is the number of screenings completed within
the relevant year. The percentage of direct and indirect spend on screened
suppliers is calculated by dividing the total direct and indirect spend of the
Hempel Group within the relevant year by the amount of direct and indirect spend
on screened suppliers within the last three years.
Code of Conduct 2024 2023
Percentage of employees with a Hempel e-mail address who
completed and signed off on the Code of Conduct Refresher 99% 99%
Compliance cases 2024 2023
Open compliance cases, beginning of the period 16 15
New compliance cases reported during the year 56 65
– Environment, health & safety 3 -
– Work environment 14 27
– Integrity 39 38
Compliance cases closed as substantiated during the year 30 33
Compliance cases closed as unsubstantiated during the year 32 31
Total cases under investigation, end of period 10 16
Sustainability Procurement Screening Programme 2024 2023
Suppliers screened 184 25
% of direct and indirect spend suppliers screened through
Hempel Procurement Sustainability Screening 61% 44%
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 66
Topic Disclosures What is Hempel doing Reference
Governance
a. Describe the board’s oversight of climate-
related risks and opportunities.
The Board of Directors maintains full overview of Hempel’s key risks, including any risks and
opportunities related to climate and/or environmental sustainability. The risk identification process,
as well as risk reporting, is anchored in our Enterprise Risk Management (ERM) Policy.
The Board of Directors has overall responsibility for reviewing and challenging the top key risks
on a biannual basis; the Audit Committee has responsibility for overseeing the effectiveness of
the risk management activities.
Page 39-53
(Corporate Governance)
b. Describe management’s role in assessing
and managing climate-related risks and
opportunities.
Executive Group Management, including the Risk Committee, oversees our risk management process
on a quarterly basis. This also includes a holistic review of the key risks in our
segments and functions.
Furthermore it is the Executive Group Management’s role to ensure that the risk appetite in our
strategy, objectives, and business model is appropriate to ensure a sustainable business.
Page 39-53
(Corporate Governance)
Strategy
a. Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
Climate change is one of the top risks to Hempel and has the potential to impact our business in the
short, medium and long term. We are exposed to various physical risks from the effects of climate
change, both at our factories and our R&D centres around the world. The risks include extreme
weather and water scarcity, as well as the fact that our products contain VOCs and solvents. Further,
we must ensure that our production facilities are adequately protected to secure resilience.
We assess risk stemming from the changing physical environment – such as acute and chronic
weather changes (e.g., flood, fires, droughts, increasing temperatures and rising sea levels) –
as part of our overarching ERM process. Potential regulatory risks associated with the shift to
a low carbon emissions economy may impact governmental regulation and our ability to deliver
on our strategic objectives. The potential regulatory risk can have a significant impact on our
ability to manufacture our products in their current form. Although these risks are significant,
they also present opportunities for R&D, new product development and recycling.
Page 39-53
(Corporate Governance)
b. Describe the impact of climate-related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
The potential impacts of climate change are taken into account when we assess our top enterprise-
wide risks.
The materiality assessment highlighted the most material issues for Hempel to focus on,
including greenhouse gas (GHG) emissions, resource consumption, waste disposal, hazardous
materials, and social and economic inequality.
Page 23-24
(Double Materiality Assessment)
Page 39-53
(Corporate Governance)
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
We have performed a scenario analysis for our science-based targets. This is the starting point
we are using to formulate our climate adaptation strategy to ensure long-term business continuity.
Page 28-29
(Science-based targets)
Risk
management
a. Describe the organisation’s processes for
identifying and assessing climate-related risks.
The process for assessing and identifying climate-related risks is the same as identifying any other
principal business risks. The overall process is an integral part of the ERM framework,
which enables us to assess risks and opportunities in a consistent manner.
Our current method is based on a scenario analysis in which we evaluate risks based on the
possible risk scenario and how it could impact our objectives.
Page 39-53
(Corporate Governance)
b. Describe the organisation’s processes for
managing climate-related risks.
We continue to review our business risks and opportunities consistently. The top key risks are
reported to our Executive Group Management and the Board of Directors according to our ERM
framework and our Annual Enterprise Risk Management Cycle.
Page 39-53
(Corporate Governance)
c. Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall
risk management.
We continue to consider and integrate climate-related matters into our overarching ERM framework
in order to identify and analyse relevant climate-related data. We are also continuing to develop tools
and explore opportunities for third-party data to measure and quantify climate-related risks.
Page 39-53
(Corporate Governance)
Metrics
& targets
a. Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy and
risk management process.
We report on environmental targets and KPIs in our annual report. Relevant metrics include energy
consumption, waste generation and disposal method, GHG emissions, carbon intensity and
hazardous materials management.
Page 61-66 (ESG data)
b. Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse gas (GHG)
emissions and the related risks.
We report absolute CO
2
emissions on Scope 1, 2 and 3 in our annual report. We report according to
the Greenhouse Gas Protocol and our data reporting is subject to a limited assurance statement by
our independent auditors.
Page 28-29
(Science-based targets)
Page 61-66 (ESG data)
c. Describe the targets used by the organisa-
tion to manage climate-related risks and oppor-
tunities and performance against targets.
We have set validated science-based targets for Scope 1, 2 and 3 CO
2
e emissions. We are committed
to the UN Global Compact, Climate Group’s EV100, and disclosure through the EcoVadis platform.
Page 28-29
(Science-based targets)
Page 25 (ESG ratings and exter-
nal recognitions)
TCFD Table
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 67
Topics 2022 Material topics 2024 Material topics Futureproof Targets SDGs
E
Climate crisis
E1 Climate change • 90% reduction of Scope 1 & 2 CO
2
e emissions by 2026 (2019 baseline)
• Reduce CO
2
e emissions in our value chain by 50% by 2030 (Scope 3)
• Reduce customer emissions by at least 35 million tonnes CO
2
e by 2025
1
E2 Pollution
Biodiversity crisis E4 Biodiversity
Resource depletion E5 Circularity • Achieve zero waste to landfill at our production sites by end of 2025
• Achieve 50% recycled plastic in primary plastic packaging by end of 2025
• 1.3 million cans collected and recycled through the Can Back Scheme
S
Health and Wellbeing
S1 Own workforce • Complete a five-year plan for reducing and phasing out hazardous materials
• Build an even stronger safety culture and eliminate all Lost Time Accidents and other injuries
• Achieve the targets of 34% women in general workforce and 31% women in leadership by 2024
S2 Workers in the value chain • Promote and further good ethical behaviour and environmental practices in our supply chain
G
G1 Governance • Promote and further good ethical behaviour and environmental practices in our supply chain
Target summary
1
The target has been restated based on Hempel’s Hempaguard X7 data, which was third-party validated
in 2024. The new baseline year is 2013 when Hempaguard X7 was launched.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 68
Financial
statements
→ Consolidated financial statements
→ Parent company financial statements
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
Introduction 69
Consolidated financial statements
Notes
1. Basis of preparation
1.1 Material accounting policy information
. . . . . . . . . . . . . . . 75
1.2 Significant accounting estimates and judgements
. . . . . . . 78
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
2.3 Special items
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
2.4 Income tax, tax assets and liabilities
. . . . . . . . . . . . . . . . . 83
3. Operating assets and liabilities
3.1 Intangible assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
3.2 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . . . 90
3.3 Leases
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
3.4 Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
3.5 Trade receivables
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
3.6 Pension and other post-employment benefit obligations
. . . 96
3.7 Provisions
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
3.8 Other liabilities
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
4. Capital structure and financing items
4.1 Share capital, distribution to shareholder
. . . . . . . . . . . . 100
4.2 Borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
4.3 Financial risks
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
4.4 Financial instruments
. . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.5 Financial income and expenses
. . . . . . . . . . . . . . . . . . . 107
4.6 Discontinued operations
. . . . . . . . . . . . . . . . . . . . . . . . 108
5. Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
. . . . 109
5.2 Adjustment for non-cash items
. . . . . . . . . . . . . . . . . . . . 109
5.3 Contingent liabilities and other commitments
. . . . . . . . . . 109
5.4 Events after the reporting period
. . . . . . . . . . . . . . . . . . 109
5.5 Related parties and ownership
. . . . . . . . . . . . . . . . . . . 110
5.6 The Hempel Group
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
5.7 Financial definitions
. . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Primary statements
Consolidated statement of profit and loss . . . . . . . . . . . . . . . . 71
Consolidated statement of comprehensive income
. . . . . . . . . 71
Consolidated statement of financial position
. . . . . . . . . . . . . 72
Consolidated statement of changes in equity
. . . . . . . . . . . . . 73
Consolidated cash flow statement
. . . . . . . . . . . . . . . . . . . . . 74
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 70
Consolidated statement of profit and loss Consolidated statement of comprehensive income
Note (EUR m) 2024 2023
 1
2.1 Revenue 2,185 2,170
2.3 Production costs - 1,237 - 1,268
Gross profit 948 902
2.3 Sales and distribution costs - 511 - 519
2.3 Administrative costs - 160 - 148
Operating profit 277 235
4.5 Financial income 39 28
4.5 Financial expenses - 96 - 121
Profit before tax 220 142
2.4 Income tax - 50 - 20
Net profit for the year from continuing operations 170 122
4.6 Net loss for the year from discontinued operations - 90 - 72
Net profit for the year 80 50
Attributable to:
Equity holders of the parent company 60 41
Non-controlling interests 20 9
Net profit for the year 80 50
1
  2023 has been restated to reflect the classification as a discontinued operation of Hempel’s decorative business in
Germany and France – see note 4.6 Discontinued operations for further information.
Note (EUR m) 2024 2023
Net profit for the year 80 50
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange rate differences on translation of foreign operations 57 1
4.4 Value adjustments of hedges 3 - 5
2.4 Tax on other comprehensive income - 6 - 1
Items that will not be reclassified to profit or loss:
3.6 Remeasurements of defined benefit pension obligations 2 - 1
2.4 Tax on other comprehensive income - -
Other comprehensive income for the year, net of tax 56 - 6
Total comprehensive income for the year 136 44
Attributable to:
Equity holders of the parent company 113 37
Non-controlling interests 23 7
Total comprehensive income for the year 136 44
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 71
Consolidated statement of financial position
31 December
Note (EUR m) 2024 2023
3.1 Intangible assets 793 761
3.2 Property, plant and equipment 480 492
3.3 Right-of-use assets 122 136
Other financial assets 9 13
3.6 Defined benefit pension plan surpluses 4 2
2.4 Deferred tax assets 122 112
Total non-current assets 1,530 1,516
3.4 Inventories 336 332
3.5 Trade receivables 450 505
Income tax receivables 22 18
Prepayments 20 18
Other receivables 63 71
Cash 210 209
Total current assets 1,101 1,153
Total assets 2,631 2,669
Note (EUR m) 2024 2023
4.1 Share capital 19 15
4.1 Share premium 590 -
4.1 Warrants 6 -
Translation reserve 28 - 24
Cash flow hedging - 2 - 4
Retained earnings 417 490
Proposed dividend for the year - 25
Shareholders in Hempel A/S’s share of equity 1,058 502
Non-controlling interests 67 57
Total equity 1,125 559
4.2 Borrowings 548 1,034
3.3 Lease liabilities 95 105
3.7 Provisions 55 36
3.6 Defined benefit pension plan deficits 22 21
2.4 Deferred tax liabilities 70 77
Total non-current liabilities 790 1,273
4.2 Borrowings 75 53
3.3 Lease liabilities 34 35
Trade payables 317 332
5.5 Payables to parent companies - 57
Deferred income 7 8
3.7 Provisions 16 10
Income tax payables 44 41
3.8 Other liabilities 223 301
Total current liabilities 716 837
Total liabilities 1,506 2,110
Total equity and liabilities 2,631 2,669
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 72
Consolidated statement of changes in equity
Note (EUR m) Share
capital
Share
premium
Warrants Translation
reserve
Cash flow
hedging
Retained
earnings
Proposed
dividend
Shareholders
in Hempel A/S’
share of equity
Non-
controlling
interests
Total
equity
Equity at 1 January 2023 15 - - - 25 - 529 - 519 28 547
Net profit for the year - - - - - 41 - 41 9 50
Other comprehensive income - - - 1 - 4 - 1 - - 4 - 2 - 6
Total comprehensive income for the year - - - 1 - 4 40
- 37 7 44
Transactions with owners in their capacity as owners:
Paid extraordinary dividend - - - - - - 26 - - 26 - - 26
Paid dividend - - - - - - - - - 5 - 5
Proposed dividend - - - - - - 25 25 - - -
Transactions with non-controlling interests
1
- - - - - - 28 - - 28 27 - 1
Total transactions with owners - - - - - - 79 25 - 54 22 - 32
4.1 Equity at 31 December 2023 15 - - - 24 - 4 490 25 502 57 559
Equity at 1 January 2024 15 - - - 24 - 4 490 25 502 57 559
Net profit for the year - - - - - 60 - 60 20 80
Other comprehensive income - - - 52 2 - 1 - 53 3 56
Total comprehensive income for the year - - - 52 2 59
- 113 23 136
Transactions with owners in their capacity as owners:
Additional share issue and contribution 4 590 6 - - - - 600 - 600
Paid extraordinary dividend - - - - - - 132 - - 132 - - 132
Paid dividends - - - - - - - 25 - 25 - 13 - 38
Total transactions with owners 4 590 6 - - - 132 - 25 443 - 13 430
4.1 Equity at 31 December 2024
 2
19 590 6 28 - 2 417 - 1,058 67 1,125
1
On 28 June 2023, the remaining 35% of shares in the JWO Group, previously recognised as non-controlling interests, were acquired. The non-controlling
interests related to the 35% of shares have been transferred directly to retained earnings.
2
Transaction costs totalling EUR 12 million were accounted for as a deduction from equity in the year ended 31 December 2024.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 73
Consolidated cash flow statement
Note (EUR m) 2024 2023
Cash flows from financing activities
4.4 Repayment of lease liabilities - 37 - 38
Proceeds from borrowings 317 188
Repayment of borrowings - 840 - 105
Proceeds of issue of equity 600 -
Transactions with shareholders:
4.1 Dividend distributed to shareholders - 157 - 26
4.1 Dividend distributed to and other transactions with non-controlling interests - 18 - 7
Total cash flows from financing activities - 135 12
Net cash flow 4 41
Cash beginning of year 209 183
Exchange adjustment - 3 - 15
Cash end of year 210 209
Note (EUR m) 2024 2023
Cash flows from operating activities
Operating profit 277 235
Operating profit from discontinued operations - 81 - 57
5.2 Adjustment for non-cash items 209 172
Total cash flows from operating activities before financial items, tax and
changes in working capital 405 350
Changes in working capital:
Change in receivables 16 - 62
Change in inventories - 26 1
Change in trade payables, other liabilities etc. - 36 - 26
Total change in working capital - 46 - 87
Total cash flows from operating activities before financial items and tax 359 263
Income tax paid - 75 - 62
Interest received 9 12
Interest paid - 68 - 86
Total cash flows from operating activities 225 127
Cash flows from investing activities
Purchase of property, plant and equipment - 61 - 71
Purchase of intangible assets - 32 - 34
Sale of property, plant and equipment 3 1
Divestment of enterprises 4 6
Total cash flows from investing activities - 86 - 98
Free cash flow 139 29
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 74
1 Basis of preparation
Introduction
The consolidated financial statements of
Hempel A/S for the period 1 January –
31 December 2024 comprise Hempel A/S
and its subsidiaries (the Group).
The Board of Directors considered and approved
the 2024 Annual Report of Hempel A/S on 4 March
2025. The Annual Report will be submitted to the
shareholders of Hempel A/S for approval at the
Annual General Meeting on 21 May 2025.
Accounting policies
The consolidated financial statements have been
prepared in accordance with IFRS as endorsed
by the EU and additional Danish disclosure
requirements applying to entities of reporting
class C for large companies.
The notes are grouped in sections and include
the relevant accounting policies. The Group’s
significant accounting estimates and judgements
are described in note 1.2 Significant accounting
estimates and judgements.
Basis of measurement
The consolidated financial statements have been
prepared under the historical cost basis, except
for derivative financial instruments and assets
held for sale that are measured at fair value. The
accounting policies have been applied consistently
in the preparation of the consolidated financial
statements and for the comparative figures.
Discontinued operations
Discontinued operations are excluded from the
results of continuing operations and presented
as a single amount in profit and loss after tax
from discontinued operations in the statement
of profit and loss. For discontinued operations,
comparatives are restated in the statement
of profit and loss. Refer also to note 4.6
Discontinued operations.
New standards, interpretations
and amendments adopted
The Group applied certain standards, interpre-
tations and amendments, which are effective for
annual periods beginning on or after 1 January
2024: Amendments to IAS 1 ‘Presentation of
Financial Statements’, IAS 7 ‘Statement of Cash
Flows’, IFRS 7 ‘Financial Instruments: Disclosures’
and IFRS 16 ‘Leases’.
The amendments listed above did not have any
impact on the amounts recognised in current or
prior periods and are not expected to significantly
affect future periods.
Changes to IAS 1 Presentation of Financial
Statements
The changes to IAS 1 require additional
disclosures of the risk that non-current liabilities,
which are subject to covenants, could become
payable within 12 months after the balance sheet
date. Reference is made to note 4.1 Share capital,
distribution to shareholders.
New standards and interpretations
not yet adopted
New accounting standards and interpretations
that have been issued, but are not mandatory for
the 31 December 2024 reporting period, have not
been early adopted by the Group. These standards
are not expected to have a material impact on
recognition or measurement for the Group in
future reporting periods, or on foreseeable future
transactions.
IFRS 18 ‘Presentation and Disclosure in Financial
Statements’ replaces IAS 1 ‘Presentation of
Financial Statements’ and is effective for reporting
periods beginning on or after 1 January 2027.
The Group is working to identify the impact of
IFRS 18 on the primary financial statements and
the note disclosures.
Basis of consolidation
The consolidated financial statements comprise
the parent company, Hempel A/S, and entities
controlled by Hempel A/S (subsidiaries). Control
is achieved when the Group is exposed to, or has
a right to, variable returns from its involvement
with the investee and has the power to affect
those returns through its power over the investee.
Subsidiaries are consolidated from the date on
which control commences until the date on which
control ceases.
Control is usually achieved by directly or indirectly
owning, or in other ways controlling, more than
50% of the votes or other rights through agree-
ments of management control. De facto control
and other potential voting rights at the balance
sheet date are also considered when determining
whether control is achieved. Consolidation is
performed by summarising the financial state-
ments of the parent company and its subsidiaries.
On consolidation, items of a uniform nature are
combined. Elimination is made of intercompany
income and expenses, shareholdings, dividends
and intra-Group balance accounts as well as of
realised and unrealised gains and losses on trans-
actions between the consolidated enterprises.
1.1 Material accounting policy information
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 75
When the Group loses control of a subsidiary,
it derecognises the assets (including goodwill),
liabilities, the carrying amount of any non-
controlling interests and components of equity
attributable to the non-controlling interests.
Any gain or loss is recognised within other
operating income and expenses.
The acquisition method of accounting is used to
account for business combinations by the Group.
Non-controlling interests
Non-controlling interests’ share in the results
and equity of subsidiaries is shown separately
in the consolidated statement of profit and loss,
statement of comprehensive income, statement
of financial position and statement of changes
in equity, respectively.
The Group treats transactions with non-controlling
interests that do not result in a loss of control
as transactions with equity owners of the Group.
A change in ownership interest results in an
adjustment between the carrying amounts of
the controlling and non-controlling interests to
reflect their relative interests in the subsidiary.
Any difference between the amount of the
adjustment to non- controlling interests and any
consideration paid or received is recognised in
retained earnings within equity.
Presentation currency
The functional currency of the parent company
is DKK, however the consolidated financial
statements are presented in million EUR as the
Group operates in a global environment with
international stakeholders.
Translation of transactions and balances
in foreign currencies
Items included in the financial statements of
each of Hempel’s entities are measured using the
currency of the primary economic environment in
which the entity operates (functional currency).
Transactions denominated in currencies other than
the functional currency are considered transactions
denominated in foreign currencies. Transactions in
foreign currencies are translated into the functional
currency of the entity using exchange rates
prevailing at the date of transaction.
Receivables, payables and other monetary items
denominated in foreign currencies are translated at
the exchange rates on the reporting date. Foreign
exchange differences arising between the exchange
rates at the transaction date and at the date of
payment are recognised as foreign exchange gains
and losses in the statement of profit and loss as
financial income or financial expenses.
Non-monetary items recognised in foreign
currencies are measured at the transaction
date exchange rates and are not subsequently
retranslated.
Translation of Group companies
The results and financial position of foreign
operations with a functional currency other than
EUR (and which is not the currency of a hyper-
inflationary economy) are translated into the
presentation currency EUR as follows:
• assets and liabilities are translated at the
exchange rate on the reporting date
• income and expenses in profit and loss and in
the statement of comprehensive income are
translated at monthly average exchange rates
(unless this is not a reasonable approximation
of the rates prevailing on the transaction dates,
in which case income and expenses are trans-
lated at the dates of the transactions)
• share capital denominated in a currency that
differs from the presentation currency of the
consolidated financial statements is translated
at historical cost
• all resulting exchange differences are recog-
nised in other comprehensive income and
attributed to a separate component of equity
(translation reserve). However, where the
entity is not whollyowned, a proportion of the
translation difference is allocated to the non-
controlling interests.
Foreign currency translation adjustments arising
on loans to, or borrowings from, subsidiaries
which are neither planned nor likely to be settled
in the foreseeable future, and which are therefore
considered to form part of the net investment in
the subsidiary, are recognised directly in other
comprehensive income under the separate trans-
lation reserve within equity. When a foreign oper-
ation is derecognised, the associated cumulative
exchange rate differences are reclassified to profit
or loss, as part of the gain or loss on sale. Repay-
ment of loans considered a part of the net invest-
ment in a subsidiary is not considered a disposal
when Hempel retains its proportionate ownership
interests, thus the cumulative exchange difference
is not reclassified to profit and loss.
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation.
Hyperinflation
In foreign subsidiaries that operate in hyper-
inflationary economies, income and expenses are
translated into the presentational currency EUR
at the exchange rate at the balance sheet date.
Prior to translating the financial statements of
foreign operations in hyperinflationary economies,
the income statement and non-monetary balance
sheet items are restated taking into account
changes in the general purchasing power of the
functional currency based on the inflation up to
the balance sheet date (‘inflation adjustment’).
The effect of the inflation adjustment is recog-
nised in Other comprehensive income within the
1.1 Material accounting policy information — continued
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 76
translation reserve. In the income statement,
gain/loss on the net monetary position in the
foreign entities is recognised as financial income
or expense.
The assessment as to when an economy is
hyperinflationary is based on qualitative as well
as quantitative factors, including whether the
accumulated inflation over a three-year period
exceeds 100%. Currently, Turkey and Argentina
are considered hyperinflationary economies and
thus the Group’s operations in Argentina and
Turkey have been remeasured in accordance with
the principles described, applying the national
Consumer Price Index (CPI) of Argentina and
Turkey, respectively, for the inflation adjustment.
Classification of operating expenses in the
statement of profit and loss
Production costs
Production costs comprise costs incurred to
generate revenue for the year. Costs comprise raw
materials, consumables, direct labour costs and
indirect production costs, such as maintenance,
amortisation and depreciation, as well as costs
for operation, administration and management of
factories. Production costs also include research
and development costs that do not qualify for
capitalisation as well as amortisation of capitalised
development costs (except for amortisation of
business application software). Write-downs of
inventory are also included.
Sales and distribution costs
Sales and distribution costs comprise costs
incurred to distribute products and for sales
campaigns, including costs for sales and distri-
bution staff, advertising costs, depreciation of
sales equipment and amortisation of customer
relationships.
Administrative costs
Administrative costs comprise costs incurred for
management and administration of the Group,
including costs for administrative staff and
management as well as office costs, depreciation
and write-downs for bad debt. Amortisation of
brands and software business applications are
also recognised in administrative costs.
Cash flow statement
The statement of cash flows is presented using
the indirect method. The statement of cash
flows for the Group shows the cash flows for the
year, broken down into operating, investing and
financing activities and changes in the Group’s
cash and cash equivalents from the beginning of
the year to the end of the year. The statement of
cash flows cannot be immediately derived from
the published financial records.
Cash flow from operating activities
Cash flow from operating activities is calculated
as the operating profit or loss for the year adjusted
for changes in working capital, non-cash items
such as depreciation, amortisation and impair-
ment losses and provisions, as well as interest
and tax paid.
Cash flow from investing activities
Cash flow from investing activities comprises cash
flows from purchases and disposals of intangible
assets, property, plant and equipment and acqui-
sitions/divestments of enterprises.
Cash flow from financing activities
Cash flow from financing activities comprises
cash flows from the raising and repayment of
principal long-term and short-term debt, including
repayment of lease liabilities as well as payments
to and from shareholders.
Cash flow in currencies other than the
functional currency
Cash flow in currencies other than the functional
currency are translated at the average exchange
rates for the month, unless these differ significantly
from the rates at the transaction date, in which
case the exchange rate at the transaction date
is applied.
Cash
Cash comprises cash at hand and bank deposits.
1.1 Material accounting policy information — continued
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 77
1.2 Significant accounting estimates and judgements
In preparation of the consolidated financial
statements, management is required to make
various accounting judgements and estimates that
affect the reported amounts of assets, liabilities,
income and expenses, including the related
disclosures. A degree of uncertainty is involved
in carrying out these judgements and estimates
which could result in adjustments to the carrying
amount of assets and liabilities in future periods.
The judgements, estimates and the related
assumptions made are based on historical
experience and other factors that management
considers to be reasonable under the given
circumstances. Estimates and judgements are
reviewed on an ongoing basis.
The Group’s significant accounting estimates and
judgements are described below.
Significant accounting estimates
The significant accounting estimates are those
that have a significant risk of resulting in a mate-
rial adjustment to the carrying amounts of assets
and liabilities in a subsequent reporting period.
Warranties
The Group generally offers warranties for its
products and receives claims under these
warranties. Management makes estimates
regarding the related provisions, both for claims
that have already been received and for claims
that may be received in the future related
to products already sold that are still under
warranty at the reporting date. For claims already
received estimates take into account technical
assessments of the validity of the claim, the
costs of remediation and input from internal
and external counsel regarding the probability
of pending legal disputes and future litigation
outcomes. For claims not yet received related to
products sold before the reporting date, historical
warranty claim information is used as the basis
of the estimate of the provision, as well as
recent trends that might suggest that historical
claim levels do not accurately represent an
approximation of the costs of future claims.
Factors that could impact the estimated amounts
include whether the claims are received and
deemed valid, to what extent the claims are
covered by the product warranty and estimates
of the costs of coating products and other
associated costs for remediating any product
failure. Reference is made to note 3.7 Provisions
for information about the Group’s warranty
provision.
The Group has taken out insurance against
product failures. The product failure insurance is,
to a certain extent, linked to the size and nature
of claims. This reduces the overall exposure to
warranty claims and the potential net impact on
profit and loss from claims.
Uncertain tax positions
Hempel has activities and subsidiaries in many
different countries, and therefore is subject to
income taxes in tax jurisdictions around the world.
Uncertain tax positions relate to uncertainty in the
interpretation of tax legislation in the countries
Hempel operates in.
Significant estimates and judgements are required
when determining the worldwide accrual for
income taxes, deferred income tax assets and
liabilities, and provision for uncertain tax positions.
In the course of conducting business globally,
transfer pricing disputes with tax authorities may
occur, and management’s judgement is applied
to assess the possible outcome of such disputes.
Hempel believes that the provision made for
uncertain tax positions is adequate. However,
due to the uncertainty, there is a possibility that,
on conclusion of open tax matters at a future
date, the final outcome may differ significantly.
Reference is made to note 2.4 Income tax, tax
assets and liabilities.
Valuation of deferred tax assets
The deferred tax assets are recognised for carry-
forward tax losses expected to be utilised and
temporary deductible differences.
The Group recognises deferred tax assets,
including the expected value of carry-forward
tax losses, based on an assessment of the
recoverability of the deferred tax assets, both
at the initial recognision and subseqently on a
regular basis.
The assessment of the recoverability of the
deferred tax assets involves estimates by manage-
ment as to the likelihood of the utilisation of the
deferred tax assets within a foreseeable future.
This depends on a number of factors, including
whether there will be sufficient taxable profits
available in future periods, against which the
carry- forward tax losses can be utilised. In the
event that actual future taxable profits generated
are less than expected, impairment of the deferred
tax assets may be required. Reference is made to
note 2.4 Income tax, tax assets and liabilities.
Impairment test of goodwill
In performing the annual impairment test,
management assesses whether the groups
of Cash Generating Units (CGUs) to which the
goodwill relates will be able to generate sufficient
positive net cash flows to support their carrying
amount together with other net assets of the
respective groups of CGUs. This assessment is
based on estimates of expected future cash flows.
The cash flows are derived from the forecast for
the next five years and do not include restructuring
activities that Hempel is not yet committed to or
significant future investments that will enhance
the performance of the assets of the groups of
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 78
CGUs being tested. The recoverable amount is
sensitive to the discount rate used, as well as
the expected future cash inflows and the terminal
growth rate used for extrapolation purposes.
The key assumptions used to determine the
recoverable amount for the different groups of
CGUs are disclosed and further explained in note
3.1 Intangible assets.
Impairment test of brand
In performing the annual impairment test of the
Farrow & Ball brand, management assesses
whether the brand will be able to generate
sufficient positive net cash flows to support the
carrying amount of the brand. The assessment
is performed using a relief-from-royalty method
based on expected future cash flows generated
from the royalty savings attributable to owning
the brand. The expected cash flows are based
on assumptions about the royalty rate, expected
future revenue and the discount rate. The key
assumptions used to determine the recoverable
amount of the brand are disclosed and further
explained in note 3.1 Intangible assets.
Significant accounting judgements
The significant judgements, apart from those
that involve estimations, are the judgements that
management made in the process of applying the
Group’s accounting policies and that have the
most significant effect on the amounts recognised
in the consolidated financial statements.
Useful life of brands
Management has assessed that certain brands,
in particular the Farrow & Ball brand, have an
indefinite useful life as there is no foreseeable
limit to the period over which the brand is
expected to generate net cash inflows, based on
the brand being well-established in its markets,
having existed for decades and having no legal,
regulatory, contractual, competitive, economic or
other factors limiting the useful life of the brand.
1.2 Significant accounting estimates and judgements — continued
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 79
2 Results for the year
Accounting policies
The Group mainly generates revenue from the
sale of paints and coatings (goods for resale and
finished goods) based on prices and conditions
stated in the contracts with customers. The primary
revenue-generating activity comprises sale of
finished goods. In addition, the Group generates
a minor part of its revenue from the provision of
technical services.
Revenue from sale of paints and coatings is recog-
nised when the related performance obligation is
satisfied by transferring control of the promised
goods to a customer. The Group’s customer con-
tracts usually include only a single performance
obligation. Control of the paints and coatings is
obtained when the goods are transferred to the
customer. Where the Group provides technical
services, including advice, training, project over-
sight and surface management services, etc.,
revenue is recognised over time as the services
are rendered.
Revenue from contracts with customers is meas-
ured at an amount that reflects the consideration
to which Hempel expects to be entitled in exchange
for those goods and services (trans action price),
which normally comprises the price specified
in the contract, net of discounts and customer
bonuses.
The Group offers various discounts, including
rebates, bonuses, volume discounts and pay-
ments to customers depending on the nature of
the customer and business. These discounts are
considered variable consideration. Bonuses and
discounts payable to a customer are accrued
for as the related performance obligations are
satisfied and revenue is recognised. Historical
experience is used to estimate and provide for
the discounts, using the expected value method.
Variable consideration related to discounts is only
recognised as revenue to the extent that it is highly
probable that a significant reversal will not occur
in a later period. In the case of expected returns,
a refund liability and a right to the returned goods
(included in other current assets) are recognised
for the products expected to be returned.
Revenue
The vast majority of the Group’s performance
obligations are satisfied within one year or less.
Amounts for remaining performance obligations
(order backlog) are therefore not disclosed
in accordance with the practical expedient in
IFRS 15.121.
Payments from customers are due depending on
the type of customer and local business practices,
though typically within 30-90 days. Longer credit
terms are provided in certain countries, though
normally not exceeding 180 days. Retail payments
are normally due immediately after control of the
goods has transferred to the customer. Accordingly,
no significant element of financing is present.
Disaggregation of revenue
The following table displays revenue disaggregated
into sale of goods per geographical region:
(EUR m) 2024 2023
EMEA 1,225 1,157
Asia-Pacific 700 750
Americas 260 263
Total revenue 2,185 2,170
Revenue disaggregated into sale of goods
per customer category:
(EUR m) 2024 2023
Decorative 653 610
Marine 709 725
Energy & Infrastructure 823 835
Total revenue 2,185 2,170
Due to changes in the organisational structure
during 2024, revenue from Energy & Infrastructure
is now grouped together, in contrast to 2023 where
they were disclosed seperately. Reference is made
to note 3.1 Intangible assets for a description of
the organisational changes.
2.1 Revenue
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 80
2.2 Employee costs
Accounting policies
Employee costs include wages and salaries,
pensions, social security contributions, annual
leave and sick leave, bonuses and non-monetary
benefits. Employee costs are recognised in the
financial year in which the associated services
are rendered.
Costs for long-term employee benefits provided
by the Group are recognised in the period in which
they are earned.
For further information about the Group’s pension
plans, reference is made to note 3.6 Pensions and
other post-employment benefit obligations.
Equity-settled share-based payment transactions
are measured at fair value determined at the
date of grant and recognised as an expense over
the vesting period with a corresponding increase
in equity.
Key management compensation
Together with the Board of Directors, key manage-
ment personnel comprise individuals in the Reg-
istered Executive Management and the Executive
Group Management (EGM). Registered Executive
Management is a part of the EGM and the EGM
consists of 8 individuals (2023: 8 individuals).
Remuneration of the Executive Group Manage-
ment includes a fixed salary, company car and
other standard fringe benefits, and an annual
(EUR m) 2024 2023
Employee costs
Wages and salaries 377 382
Pensions – defined contribution plans 22 21
Pensions – defined benefit plans 2 1
Other social security contributions 24 23
Other employee costs 23 24
Total employee costs for the year 448 451
Average number of full-time employees 6,932 6,788
Employee costs have been recognised in the profit and loss as follows:
Production costs 140 135
Sales and distribution costs 229 232
Administrative costs 79 84
Total employee costs in the profit and loss 448 451
(EUR m) 2024 2023
Registered Executive Management
Wages and salaries 3.2 3.6
Pensions, defined contribution plans 0.2 0.2
Severance pay - 1.8
Other long-term benefits 1.5 3.3
Total 4.9 8.9
Other key management personnel
Wages and salaries 3.6 4.9
Pensions, defined contribution plans 0.4 0.2
Severance pay 2.0 -
Other long-term benefits 2.4 2.1
Total 8.4 7.2
Board of Directors
Board fee 1.2 1.1
Total 1.2 1.1
Total compensation to key management personnel 14.5 17. 2
bonus payment which cannot exceed 70-100%
of the individual’s fixed salary.
The annual cash bonus payment is contingent
upon the fulfilment of ESG targets, including
climate targets, and the realisation of specific
financial targets.
During the year, a management incentive plan
was implemented whereby members of the
Executive Group Management and certain other
senior managers were offered the opportunity to
purchase, at fair value, shares and warrants of
the Company.
The arrangement is classified as an equity-settled
arrangement. As the participants in the plan paid
fair value for the shares and warrants purchased,
no share-based payment expense was incurred
by the Company as a result of these equity-
settled transactions. If a participant ceases to
be an employee of the Company, the provisions
of the plan may permit or require the Company
to repurchase the leaver’s shareholdings for
either the original cost or fair value at the time of
repurchase, depending upon the circumstances.
See note 4.1 for further information.
A long-term cash-based incentive scheme,
comprised of rolling three-year cash-based bonus
programmes, was discontinued for the Executive
Group Management and certain other senior
managers during the year.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 81
2.3 Special items
Special items include significant income and
expenses of a special nature relative to the
Group’s earnings-generating activities, such as
costs related to M&A activities, integration of
acquired businesses and significant restructuring
costs. Other significant amounts of a non-recurring
nature are also included in special items.
In 2023, special items comprised employee
redundancy costs and related costs in connection
with organisational changes. Special items
also included M&A related costs, primarily
consultancy costs and an insurance settle ment
payment related to a past business acquisition.
Due to the significant impact on the statement
of profit and loss, these non-recurring items of
special nature are disclosed separately in this
note. The special items are presented in the
statement of profit and loss within the functions
shown in the table below.
Special items (EUR m) 2024 2023
Restructuring costs - 5
M&A and integration related costs - 5
Insurance settlement - - 3
Total special items - 7
(EUR m) 2024 2023
Production costs - 1
Sales and distribution costs - 3
Administrative costs - 3
Total special items - 7
All programmes were subject to vesting criteria
based on a number of factors, including the
realisation of minimum financial targets for the
nominal EBITDA accumulated over the three-year
period. The outcome was calculated at the end
of the three-year programme period. The long-
term cash incentive programme payment cannot
exceed 110-120% of the individual’s fixed annual
salary. Final payments for the relevant participants
under this scheme were made in the year and are
included in the table on the previous page.
The Board of Directors determines annually
whether to instigate new programmes and, if so,
the scope and objectives of said programmes.
The compensation paid or payable to key manage-
ment personnel for employee services is shown in
the table on the previous page. Total remuneration
for Registered Executive Management and Board
of Directors amounted to EUR 6 million in 2024
(2023: EUR 10 million).
2.2 Employee costs — continued
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 82
2.4 Income tax, tax assets and liabilities
Income tax
Accounting policies
The income tax expense for the year is the tax
payable on the current year’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted for changes in deferred tax
assets and liabilities attributable to temporary
differences and to unused tax losses, changes
due to changes in tax rates, adjustments to tax
from previous years and changes in provision for
uncertain tax positions.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries
where the parent company and its subsidiaries
operate and generate taxable income. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes
provisions, where appropriate, on the basis of
amounts expected to be paid to the tax authorities.
Current tax payable and receivable are recognised
in the consolidated statement of financial position
as tax computed on the taxable income for the
year, adjusted for tax on taxable income for prior
years and for prepaid tax.
Current tax and changes in deferred tax are recog-
nised in profit and loss, except to the extent that
it relates to items recognised in other comprehen-
sive income or directly in equity. In these cases,
the tax is also recognised in other comprehensive
income or directly in equity, respectively.
Uncertain tax positions are recognised where
the probability of the tax position being upheld
in individual cases is considered less than 50%.
Uncertain tax positions are assessed individually,
and the possible outcome is measured based
on management’s best estimate of the amount
required to settle the obligation. Uncertain tax
positions relate to various tax disputes, including
transfer pricing cases.
Tax for the year (EUR m) 2024 2023
 1
Tax for the year is specified as follows:
Tax on profit for the year - 50 - 20
Tax on other comprehensive income - 6 - 1
Total tax for the year - 56 - 21
Tax on profit for the year is calculated as follows:
Current tax for the year - 72 - 58
Deferred tax for the year 23 41
Adjustment in respect of previous years - 1 - 3
Total tax on profit for the year - 50 - 20
Effective tax rate of the Group
Danish tax rate 22.0% 22.0%
Higher/(lower) tax rates of foreign subsidiaries - 1.8% - 5.8%
Permanent differences 0.6% 1.1%
Unrecognised deferred tax assets 5.9% 8.6%
Recognised deferred tax assets related to prior years - 7.4% - 4.6%
Adjustments in respect of previous years - 0.3% - 2.2%
Other adjustments (mainly changes in uncertain tax position) 0.1% - 10.3%
Withholding taxes etc. 2.2% 4.4%
Effective tax rate of the Group excluding hyperinflation 21.3% 13.2%
Hyperinflation 1.4% 0.8%
Effective tax rate of the Group 22.7% 14.0%
1
2023 has been restated to reflect the classification as a discontinued operation of Hempel’s decorative business in Germany
and France – see note 4.6 Discontinued operations for further information. Net loss before tax in 2023 for discontinued
operations was EUR 61 million whereas the tax expense was EUR 1 million.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 83
2.4 Income tax, tax assets and liabilities — continued
Deferred tax
Accounting policies
Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the consolidated
financial statements. However, deferred tax
liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax
is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction
other than a business combination that, at the
time of the transaction, affects neither accounting
profit nor taxable profit or loss. Deferred income
tax is calculated using tax rates (and laws) that
have been enacted or substantially enacted by the
end of the reporting period and are expected to
apply when the related deferred income tax asset
is realised or the deferred income tax liability is
settled. Deferred tax is adjusted for elimination of
unrealised intra-group gains and losses.
Deferred tax assets are recognised if it is probable
that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recog-
nised for temporary differences between the
carrying amount and tax bases of investments in
foreign operations where Hempel A/S is able to
control the timing of the reversal of the temporary
differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets and liabilities and when the
deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are
offset where the entity has a legally enforceable
right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability
simultaneously.
Deferred tax recognised in the balance sheet (EUR m) 2024 2023
Deferred tax, beginning of year 35 - 5
Recognised in profit or loss 22 41
Adjustments in respect of previous years - 5 - 1
Deferred tax assets and liabilities at 31 December, net 52 35
Specification of deferred tax assets (EUR m) 2024 2023
Intangible assets 16 14
Property, plant and equipment 7 5
Inventories 2 2
Trade receivables 2 1
Provisions and defined benefit pension obligations 30 27
Lease liabilities 1 1
Tax loss carryforwards 64 62
Deferred tax assets at 31 December 122 112
Specification of deferred tax liabilities (EUR m) 2024 2023
Intangible assets 40 38
Property, plant and equipment 2 4
Provisions and defined benefit pension obligations 28 35
Deferred tax liabilities at 31 December 70 77
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 84
The Group recognises deferred tax assets,
including the expected value of tax loss carry-
forwards, to the extent that it is probable that
taxable profit will be available against which the
deductible temporary differences and unused
tax losses can be utilised. At 31 December
2024, Hempel recognised a deferred tax asset
related to tax loss carry forwards of EUR 64 million
(2023: EUR 62 million).
Management has considered future taxable
income and applied judgement in assessing
whether deferred income tax assets should be
recognised. The assessment of the recoverability
of the deferred tax assets depends on a number
of factors, including whether there will be suffi-
cient taxable profits available in future periods
in tax jurisdictions for which the tax loss carry-
forwards can be utilised.
Assessment of the recoverability of the deferred
tax assets is based on taxable income projections
that contain estimates of, and tax strategies for,
the future taxable income, taking into account the
general market conditions, recent financial perfor-
mance of the individual entities and the Group’s
approved business plan. The projections are
based on the Group’s five-year forecast, though
in certain cases a longer forecast period is used.
Such projections are inherently subject to uncer-
tainty, as the realisation of the projections are
dependent on the outcome of future events. It is
management’s assessment that the forecast is
achievable and supports the recognised deferred
tax assets. In making this assessment, business
initiatives to improve organic growth and taxable
income are considered together with expected
allocation of future taxable income based on the
transfer pricing policy in place.
The international tax reform – Pillar Two
model rules
The Pillar Two model rules apply for the Hempel
Group as of 1 January 2024. The current tax
expense related to Pillar Two income taxes
amounts to EUR 1.7 million for 2024.
Hempel has applied the exception of not
recognising deferred tax assets and liabilities
arising from the implementation of the Pillar
Two model rules.
2.4 Income tax, tax assets and liabilities — continued
Deferred tax assets not recognised in the balance sheet (EUR m) 2024 2023
Temporary differences 1 9
Tax loss carryforwards 44 50
Total tax asset not recognised 45 59
Temporary differences, gross 3 33
Tax loss carryforwards, gross 149 195
Total gross values 152 228
Out of tax loss carry forwards 0% (2023: 1%) expire within 1 year, and 0% (2023: 0%) within 5 years from the balance sheet date and
15-20% after five years. The remaining tax loss carry forwards do not have an expiration date.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 85
3 Operating assets and liabilities
Accounting policies
Goodwill
Goodwill is initially recognised in the statement of
financial position at cost and allocated to groups
of cash-generating units (CGUs) at which goodwill
is monitored. Subsequently, goodwill is measured
at cost less accumulated impairment losses.
Goodwill is not amortised.
Brands with an indefinite useful life
Brands acquired in a business combination are
initially recognised in the statement of financial
position at fair value and subsequently measured
at cost less accumulated impairment losses.
Brands which are considered to have an indefinite
useful life are not amortised, since there is no
foreseeable limit to the period over which the
brands are expected to generate net cash inflows.
Software and software under development
Acquired software and developed software are
initially measured at cost and subsequently at cost
less amortisation and impairment losses. Acquired
software and developed software are amortised
on a straight-line basis over the estimated useful
life, which is 3-10 years, though minimum 5 years
for ERP systems.
For software as a service (SaaS) arrangements,
implementation costs are capitalised only where
customisation and configuration of the SaaS
arrangement results in an intangible asset con-
trolled by the Group. Where customisation and con-
figuration costs do not result in an intangible asset,
costs are either expensed as incurred or alterna-
tively over the contract term when the received
services are not distinct from the SaaS solution.
Software under development is recognised at cost
less impairment losses. Software under develop-
ment is not amortised.
Customer relationships
Customer relationships acquired in a business
combination are initially recognised at fair value
and subsequently measured at cost less accu-
mulated amortisation and impairment losses.
Amortisation is calculated on a straight-line basis
over the estimated useful life, which is 5-12 years.
Other intangible assets
Other intangible assets comprise development
projects such as development of products or
processes, formulas and smaller brands.
Development projects are recognised as
intangible assets where they relate to products
or processes (other than software development
projects) that are clearly defined and identifiable,
and in respect of which technical feasibility,
sufficient resources and a potential future market
or development opportunity in the enterprise can
be demonstrated, and where it is the intention
to manufacture, market or use the product or
process in question. Development projects are
initially measured at cost, which comprises
expenses, including salaries, amortisation and
external costs, directly attributable to these
development projects. Development projects are
subsequently measured at cost less amortisation
and impairment losses.
Development projects are amortised on a straight-
line basis over the estimated useful life, which is
3-10 years.
Formulas and smaller brands are measured at
cost less accumulated amortisation and impair-
ment losses. The assets are amortised on a
straight-line basis over their estimated useful
lives. The amortisation period is 2-10 years.
Amortisation and impairment losses are included
in the statement of profit and loss as follows.
3.1 Intangible assets
Amortisation and impairment losses included in profit and loss (EUR m) 2024 2023
Production costs 6 5
Sales and distribution costs 6 6
Administrative costs 17 23
Discontinued operations - 12
Total amortisation and impairment losses 29 46
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 86
Research and development costs expensed
Research and development costs not eligible for
capitalisation are expensed in the period incurred
and included in the statement of profit and loss
within production costs. In 2024, this amounted
to EUR 36 million (2023: EUR 34 million).
Re-allocation of goodwill
In 2024, the Group re-allocated goodwill to align
with the new organisational structure announced
in May 2024. The re-allocation was carried out
to reflect the new internal management reporting
and consequently how goodwill is monitored.
Before the re-allocation of goodwill was carried
out, an impairment test was performed which did
not result in an impairment.
Previously, the Group had four commercial business
units (Marine, Energy, Infrastructure and Decorative)
and one internal business unit (Technology & Oper-
ations) and goodwill was allocated to those units.
Following the reorganisation in May 2024, good-
will is now monitored on the basis of the Group’s
three commercial business units (Marine, Energy &
Infrastructure and Decorative).
The three key commercial business units manage
sales and are responsible for daily contact with
the customers.
Marine customers comprise both newbuilding
shipyards, ship owners requiring maintenance in
dry dock or at sea, and maintenance contractors.
Maintenance work relates to every area of a
vessel, most notably hull coating systems to
protect the metal structure of the vessels.
Energy customers are owners of energy assets,
which are often subject to harsh weather condi-
tions, such as windmills and other energy solution
assets. Infrastructure mainly relates to bridges,
transportation assets and other infrastructure
buildings. Customers are e.g. governments respon-
sible for maintenance of critical infrastructure,
companies that own infrastructure assets and
maintenance contractors.
Decorative sells indoor and outdoor coating
products. Decorative customers are both private
and commercial customers, e.g. retailers.
The goodwill has been reallocated to the new
groups of CGUs described above based on a
relative value approach. This has been calculated
by determining the value in use of each CGU as a
proportion of the total value in use of the Group,
and using those percentages to re-allocate the
goodwill to the new groups of CGUs.
The carrying amount of goodwill re-allocated to the
new groups of CGUs is shown in the table above
to the right: Goodwill at time of re-allocation.
Impairment of non-current assets
Goodwill, intangible assets with an indefinite
useful life and software under development
that is not subject to amortisation are tested
annually for impairment, or more frequently if
events or changes in circumstances indicate that
they might be impaired. Other assets are tested
for impairment whenever events or changes in
circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value in
use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which
there are separately identifiable cash inflows
that are largely independent of the cash inflows
from other assets or groups of assets (CGUs).
Non- financial assets other than goodwill that
suffered an impairment are reviewed for possible
reversal of the impairment at the end of each
reporting period.
Impairment test
Hempel has tested the carrying amount of soft-
ware under development, brands with indefinite
useful life and goodwill for impairment.
Following the re-allocation noted above, goodwill
is now monitored based on three commercial
business units (Marine, Energy & Infrastructure
and Decorative). As of 31 December 2024,
goodwill is allocated to the groups of CGUs
as follows:
(EUR m) 2024
Marine 180
Energy & Infrastructure 123
Decorative 254
Total goodwill 557
3.1 Intangible assets — continued
Goodwill at time of re-allocation– May 2024 (EUR m)
New groups of CGUs
Old groups of CGUs Marine Energy &
Infrastructure
Decorative Total
Marine 4 4
Energy 3 3
Infrastructure 3 3
Decorative 180 180
T&O 176 115 54 345
Total goodwill 180 121 234 535
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 87
3.1 Intangible assets — continued
Key assumption Description
Revenue growth and EBITDA margin Revenue for all commercial business units is assumed to increase over the forecasting period on average by mid to high single-
digit growth rates, assuming a slight increase in market share. This is based on past performance and assumptions about stable
raw material prices in the forecast period, the general market development in the different commercial business areas, taking into
consideration the maturity of the markets in which Hempel operates. Further, Group and local strategic initiatives are considered
when estimating the revenue growth rates for the individual commercial businesses, including initiatives focusing on increasing sales
prices and volumes. A stable EBITDA margin is assumed in all the commercial business units in the forecasting period, based on the
business units’ ability to generally increase selling prices in line with long-term inflation.
The estimated revenue growth in Decorative is, in particular, to be achieved through our strong market position, brand awareness
and companies and stores acquired in 2021 and 2022 that increase Decorative’s accessibility in selected markets. In addition,
we have expanded our e-commerce presence in key markets and opened new stores in 2024 in strategic geographical locations
which is expected to help drive an increase in volumes.
For Marine, the estimated revenue growth is to be achieved through our highly competitive products, e.g. hull coatings, and
higher sales prices through a more value-based price setting model, as well as increased sales volumes based on the assumed
continuation of the trend of increasing demand for products in the marine industry that reduce both fuel consumption and CO
2
emissions. In addition, completion of the ongoing construction of new cost-efficient factories in 2022 and 2023 has already
improved the EBITDA margin over the forecast period and the ability to continuously optimise the production and supply chain,
including higher utilisation of existing production capacity and reduction in production and employee cost.
For Energy and Infrastructure, the estimated revenue growth is based on an increased demand for high-performance sustainable
solutions in the renewable energy and infrastructure sectors, including increased focus on repair and maintenance work on corroded
steel structures, and higher sales prices through a more value-based price setting model. In addition, completion of the ongoing
construction of new cost-efficient factories in 2022 and 2023 has already improved and will continue to improve the EBITDA margin
over the forecast period and the ability to continuously optimise the production and supply chain, including higher utilisation of
existing production capacity and reduction in production and employee cost
Long-term growth The terminal growth rates do not exceed expected long-term inflation.
Pre-tax discount rate The pre-tax discount rate reflects the specific risks to the CGUs.
(EUR m) Long-term growth
rate 2024
Long-term growth
rate 2023
Pre-tax discount
rate 2024
Pre-tax discount
rate 2023
Marine 2.00% 2.00% 9.18% 10.82%
Energy & Infrastructure 2.00% 2.00% 9.67% 10.88%
Decorative 2.00% 2.00% 9.18% 9.96%
Impairment test of goodwill
As described above, goodwill was re-allocated
during the year to align with the new internal
management reporting structure. In determining
the carrying amount of net assets of each group
of CGUs, certain allocation keys were applied.
The recoverable amounts of each group of
CGUs are based on value-in-use calculations
and based on cash flow projections for the
years 2025-2029. The forecast represents
management’s best estimate of the future cash
flows and is assumed to be both reasonable
and achievable. The assumptions applied by
management in forecasting the future cash flows
reflect management’s expectations considering
all relevant factors, including Hempel’s strategic
initiatives, local initiatives, past experience and
external sources of information, where possible
and relevant. The key assumptions used in
the cash flow projections are revenue growth,
EBITDA margin, long-term growth rate and pre-
tax discount rate (refer to the table on the left).
Cash flows beyond the five-year forecast period
are extrapolated using the estimated growth
rates stated in the table on the left.
Sensitivity analysis
Management considered and assessed reason-
ably possible changes for the key assumptions
and did not identify any instances that could
cause the carrying amount of goodwill to exceed
its recoverable amount.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 88
3.1 Intangible assets — continued
Intangible assets (EUR m) Goodwill Brands
(indefinite life)
Software Intangible
assets
under
construction
Customer
relationships
Other
intangible
assets
Total
Cost at 1 January 2024 535 140 76 32 140 99 1,022
Effect of exchange rate adjustment 22 6 2 - 7 2 39
Additions for the year - - 1 31 - - 32
Transfer and reclassifications - - 39 - 49 - 10 -
Disposals for the year - - - 5 - - 17 - 3 - 25
Cost at 31 December 2024 557 146 113 14 130 108 1,068
Accumulated amortisation at 1 January 2024 - - 68 - 123 70 261
Effect of exchange rate adjustment - - 1 - 7 2 10
Amortisation for the year - - 15 - 6 8 29
Impairment losses for the year - - - - - - -
Disposals for the year - - - 5 - - 17 - 3 - 25
Accumulated amortisation at 31 December 2024 - - 79 - 119 77 275
Carrying amount at 31 December 2024 557 146 34 14 11 31 793
Cost at 1 January 2023 529 138 56 29 142 91 985
Effect of exchange rate adjustment 6 2 - 1 - - 2 1 6
Additions for the year - - - 32 - 1 33
Transfer and reclassifications - - 23 - 29 - 6 -
Disposals for the year - - - 2 - - - 2
Cost at 31 December 2023 535 140 76 32 140 99 1,022
Accumulated amortisation at 1 January 2023 - - 45 - 112 63 220
Effect of exchange rate adjustment - - - 1 - - 2 - - 3
Amortisation for the year - - 8 - 8 6 22
Impairment losses for the year - - 18 - 5 1 24
Disposals for the year - - - 2 - - - - 2
Accumulated amortisation at 31 December 2023 - - 68 - 123 70 261
Carrying amount at 31 December 2023 535 140 8 32 17 29 761
Impairment test of the Farrow & Ball brand
The carrying amount of the Farrow & Ball brand
with indefinite useful life of EUR 136 million
(2023: 136 million) was tested separately for
impairment as the brand relates to the Farrow &
Ball CGU. The recoverable amount is calculated
based on a relief-from-royalty method, assuming
a steady revenue growth of average 5.6% in the
forecasting period based on expected market
development within the luxury paint business.
The royalty rate applied in the relief-from-
royalty calculation is based on a benchmark
study for high-end brands with similar market
position to Farrow & Ball. A royalty rate of
6.15% (2023: 6.15%) and a weighted average
cost of capital (WACC) of 8.16% (2023: 9.35%)
were applied.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 89
Property, plant and equipment are measured
at cost less accumulated depreciation and
impairment losses.
Cost comprise the purchase price, including import
duties and non-refundable taxes, and expenses
directly related to the acquisition up until the time
when the asset is ready for intended use. In the
case of assets of own construction, costs comprise
direct expenses for labour, materials, components
and suppliers.
Material general and specific borrowing costs
that are directly attributable to the construction
or production of a qualifying asset are capitalised
during the period of time that is required to
complete and prepare the asset for its intended
use. Qualifying assets are assets that necessarily
take a substantial period of time to get ready for
their intended use or sale.
Subsequent costs, such as partial replacement
of property, plant and equipment, are included in
the carrying amount of the asset in question when
it is probable that such costs will result in future
economic benefits. The carrying amount of the
replaced parts is derecognised from the balance
sheet and recognised in the statement of profit
and loss. All other repairs and maintenance are
charged to profit or loss during the reporting
period in which they are incurred.
Depreciation is based on the cost of an asset
less its residual value. Depreciation is calculated
on a straight-line basis over the expected useful
lives of the assets, which are:
Buildings (max.) 50 years
Laboratory equipment 10 years
Plant and machinery 10 years
Other fixtures and fittings,
tools and equipment 3-10 years
If the individual material components of an asset
have different useful lives, each component is
depreciated separately. Gains and losses on
disposals are determined by comparing proceeds
with the carrying amount. These gains and losses
are included in other operating income and
expenses. The assets’ residual values and useful
lives are reviewed, and adjusted if necessary, at
the end of each reporting period.
Information about commitments for acquisition of
property, plant and equipment is provided in note
5.3 Contingent liabilities and other commitments.
The carrying amounts of property, plant and
equipment are reviewed on an annual basis to
determine whether there is any indication of
impairment. If an asset’s carrying amount exceeds
its recoverable amount, an impairment loss is
recognised in the statement of profit and loss.
Depreciation and impairment losses are included
in the statement of profit and loss as follows:
3.2 Property, plant and equipment
Depreciation and impairment losses included in profit and loss (EUR m) 2024 2023
Production costs 34 32
Sales and distribution costs 6 5
Administrative costs 7 6
Discontinued operations 1 19
Total depreciation and impairment losses 48 62
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 90
3.2 Property, plant and equipment — continued
Property, plant and equipment (EUR m) Land and
buildings
Plant and
machinery
Other fixtures
and fittings, tools
and equipment
Assets under
construction
Total
Cost at 1 January 2024 386 341 134 46 907
Effect of exchange rate adjustment 12 12 5 1 30
Additions for the year 6 5 7 34 52
Transfer and reclassifications - 15 16 - 31 -
Disposals for the year - 37 - 26 - 12 - 5 - 80
Cost at 31 December 2024 367 347 150 45 909
Accumulated depreciation at 1 January 2024 128 204 83 - 415
Effect of exchange rate adjustment 5 8 4 - 17
Depreciation for the year 11 23 14 - 48
Disposals for the year - 26 - 14 - 11 - - 51
Accumulated depreciation at 31 December 2024 118 221 90 - 429
Carrying amount at 31 December 2024 249 126 60 45 480
Cost at 1 January 2023 323 292 129 135 879
Effect of exchange rate adjustment - 9 - 4 - 1 - 6 - 20
Additions for the year - 4 5 50 59
Transfer and reclassifications 72 53 8 - 133 -
Disposals for the year - - 4 - 7 - - 11
Cost at 31 December 2023 386 341 134 46 907
Accumulated depreciation at 1 January 2023 100 189 79 - 368
Effect of exchange rate adjustment - 3 - 2 - 1 - - 6
Depreciation for the year 13 20 12 - 45
Impairment losses for the year 17 - - - 17
Transfer and reclassifications 1 - - 1 - -
Disposals for the year - - 3 - 6 - - 9
Accumulated depreciation at 31 December 2023 128 204 83 - 415
Carrying amount at 31 December 2023 258 137 51 46 492
There are no capitalised interest expenses for the year 2024 (2023: EUR 2 million).
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 91
Accounting policies
Lease liabilities
At the commencement date of leases, the
Group recognises lease liabilities, measured at
the present value of the lease payments to be
made over the lease term. The lease payments
include fixed payments less any lease incentive
receivables, variable lease payments that depend
on an index or rate, e.g. when a minimum indexation
is applied, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by the
Group and payment of penalties for terminating
a lease, if the lease term reflects the Group
exercising the option to terminate. The present
value is calculated using the interest rate implicit
in the lease or Group’s incremental borrowing
rate if the interest rate implicit in the lease is not
readily determinable.
Contracts may contain both lease and non-lease
components. The Group has elected to separate
lease and non-lease components. For these
contracts, the consideration promised in the
contract is allocated based on the relative stand-
alone prices between the lease and non-lease
component. Non-lease components are accounted
for in accordance with the accounting policy
applicable to such items.
Some lease contracts include extension and
termination options. Management exercises
judgement in determining whether these
options are reasonably certain to be exercised.
Management considers all relevant facts and
circumstances that create an economic incentive
to exercise the extension option.
After initial recognition, the lease liability is
measured at amortised cost using the effective
interest method. The lease liability is increased
to reflect the accretion of interest and reduced
for lease payments made. The lease liability is
remeasured when there is a change in the lease
term or a change in the assessment to purchase
the underlying asset. In addition, the lease liability
is remeasured if there is a change in future lease
payments arising from a change in an index or
rate, including revised lease payments that reflect
a change in market rental rates, or if there is a
change in the Group’s estimate of the amount
expected to be payable under a residual value
guarantee.
When lease liabilities are remeasured, a corre-
sponding adjustment is made to the carrying
amount of the right-of-use asset. If the carrying
amount of the right-of-use asset is reduced to
zero, any further reduction is recognised in the
statement of profit and loss.
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease. Right-of-use
assets are initially measured at cost comprising
the amount of the initial measurement of the lease
liability, adjusted for any lease payments made at
or before the commencement date and any initial
direct costs incurred. Dismantling and restoration
costs are not included in the calculation of the right-
of-use assets value, but are booked separately.
After initial recognition, right-of-use assets are
measured at cost less accumulated depreciation
and impairment losses and adjusted for any
remeasurement of the lease liability. Depreciation is
calculated on a straight-line basis over the shorter
of the useful life of the asset and the lease term.
Right-of-use assets mainly comprise office and
warehouse buildings, stores and vehicles, such as
cars, trucks and vans. Lease terms of buildings
are usually 5-10 years whereas vehicles typically
have a lease term of 3-5 years.
Short-term and low-value leases
Short-term and low-value leases are expensed
directly as operating costs in the statement of
profit and loss, usually on a straight-line basis
over the lease term.
The Group has recognised the following amounts
relating to leases, as shown on the next page.
Depreciation is included in the statement of profit
and loss as follows:
3.3 Leases
Depreciation included in profit and loss (EUR m) 2024 2023
Production costs 12 13
Sales and distribution costs 24 23
Administrative costs 2 2
Discontinued operations 1 2
Total depreciation 39 40
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 92
3.3 Leases — continued
The following lease expenses are recognised in the
statement of profit and loss:
Amounts relating to leases (EUR m) Land and
buildings
Vehicles Other
fixed assets
Total
Right-of-use assets
Cost at 1 January 2024 208 27 1 236
Effect of exchange rate adjustment 3 1 - 4
Additions for the year 8 13 - 21
Remeasurements 10 - - 10
Disposals for the year - 12 - 11 - - 23
Cost at 31 December 2024 217 30 1 248
Depreciation at 1 January 2024 84 16 - 100
Effect of exchange rate adjustment 2 - - 2
Depreciation for the year 31 8 - 39
Disposals for the year - 5 - 10 - - 15
Accumulated depreciation at 31 December 2024 112 14 - 126
Carrying amount at 31 December 2024 105 16 1 122
Right-of-use assets
Cost at 1 January 2023 209 27 1 237
Effect of exchange rate adjustment - 2 - - - 2
Additions for the year 6 6 - 12
Remeasurement 5 - - 5
Disposals for the year - 10 - 6 - - 16
Cost at 31 December 2023 208 27 1 236
Depreciation at 1 January 2023 62 14 - 76
Effect of exchange rate adjustment - 1 - - - 1
Depreciation for the year 32 8 - 40
Disposals for the year - 9 - 6 - - 15
Accumulated depreciation at 31 December 2023 84 16 - 100
Carrying amount at 31 December 2023 124 11 1 136
Lease liabilities (EUR m) 2024 2023
Current 34 35
Non-current 95 105
Total 129 140
Expenses relating to leases (EUR m) 2024 2023
Depreciation expense of right-of-use assets 39 40
Interest expense on lease liabilities 4 4
Expenses related to short-term leases 1 1
Total amount recognised in profit or loss 44 45
Total cash outflow from leases amounts to EUR 43 million, including cash outflow from short-term and low-value leases
(2023: EUR 43 million).
The maturity analysis of undiscounted cash flow in lease liabilities is disclosed in note 4.3 Financial risks.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 93
3.4 Inventories
Accounting policies
Inventories are measured at cost, determined
using the FIFO-method, or net realisable value if
the net realisable value is lower. Costs of inven-
tories comprise purchase costs of raw materials,
including import duties and transportation costs
directly attributable to the acquisition of raw
materials, costs of conversion and other costs
incurred in bringing the inventories to the present
location and condition.
The costs of finished goods and work in progress
also include indirect production costs, which
comprise the cost of indirect materials and labour
as well as maintenance and depreciation of the
machinery, factory buildings and equipment used
in the manufacturing process and costs of factory
administration and management.
The net realisable value is calculated as the
selling price less costs of completion and costs
necessary to make the sale and is determined
based on the most reliable evidence available
at the time the estimates are made, taking into
account obsolescence and development in
expected selling prices.
(EUR m) 2024 2023
Raw materials and consumables 108 92
Work in progress 9 9
Finished goods 219 231
Total inventories 336 332
Cost of inventories, included under production costs 1,193 1,307
Hereof write-downs to net realisable value during the year 11 12
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 94
3.5 Trade receivables
Accounting policies
Trade receivables are recognised initially at
their transaction price. The Group holds trade
receivables with the objective of collecting the
contractual cash flows and therefore measures
them subsequently at amortised cost using the
effective interest method, less loss allowance.
Due to the short-term nature of trade receivables,
amortised cost is equal to the invoiced amount
less loss allowance for expected credit losses.
Credit risk
The Group is exposed to financial and commercial
counterparties but has no particular concentration
of customers. To minimise the credit risk related
to trade receivables, financial vetting is under-
taken for all major customers and credit limits
are assigned for major customers based on the
Group’s credit risk assessment.
The Group applies the simplified approach to
providing for expected credit losses, which permits
the use of the lifetime expected loss provision for
all trade receivables. To measure the expected
credit losses, trade receivables are grouped
based on shared credit risk characteristics and
the days past due. Trade receivables not due
are also included when assessing the expected
lifetime loss provision.
Trade receivables are written off when there is no
reasonable expectation of recovery, i.e. typically
when customers are undergoing restructuring or
bankruptcy proceedings have commenced.
The Group’s maximum exposure to credit risk at
the end of the reporting period related to trade
receivables is the carrying amount of trade
receivables mentioned above. The Group does
not hold collateral as security.
Expected credit loss 2024 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 338 0.8% 2.7 335.3
Overdue 1-30 days 54 1.0% 0.5 53.5
Overdue 31-60 days 24 3.0% 0.7 23.3
Overdue 61-120 days 18 3.6% 0.6 17.4
Overdue 121-240 days 17 12.6% 2.1 14.9
Overdue 241-360 days 6 21.7% 1.3 4.7
Overdue > 360 days 40 99.0% 39.6 0.4
Total 497 47. 5 449.5
Expected credit loss 2023 (EUR m) Carrying
amount, gross
Expected
loss rate (%)
Loss
allowance
Carrying
amount, net
Current 367 0.7% 2.4 364.6
Overdue 1-30 days 63 0.6% 0.4 62.6
Overdue 31-60 days 31 1.5% 0.5 30.5
Overdue 61-120 days 23 1.6% 0.3 22.7
Overdue 121-240 days 16 7.2% 1.2 14.8
Overdue 241-360 days 4 16.8% 0.6 3.4
Overdue > 360 days 39 84.1% 32.7 6.3
Total 543 38.1 504.9
Loss allowance provision (EUR m) 2024 2023
Provision at 1 January 38 31
Sale of enterprises - 1 -
Additions for the year 14 9
Losses recognised - 5 - 2
Currency translation 2 -
Total 48 38
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 95
3.6 Pension and other post-employment benefit obligations
Accounting policies
The Group operates various post-employment
benefit plans, including defined benefit and defined
contribution pension plans.
Defined contribution plans
Hempel operates a number of defined contribution
plans which provide post-employment benefits
determined by the value of funds contributed in
respect of each employee. The Group’s contribu-
tions to defined contribution plans are recognised
in profit and loss in the year in which they become
payable. The Group’s obligation is limited to the
amount that it agrees to contribute to the plans;
it has no further obligation once the contributions
have been paid. Contributions payable are recog-
nised in the statement of financial position within
other current liabilities.
Defined benefit plans
For defined benefit post-employment benefit
plans, the surplus or deficit recognised in the
statement of financial position for each plan
is determined as the fair value of the plan
assets less the present value of the defined
benefit obligation at the end of the reporting
period. The defined benefit obligation and cost
of providing benefits is calculated annually by
independent actuaries using the projected unit
credit method. This is done separately for each
major plan by estimating the amount of future
benefits that employees have earned in return
for their service in the current and prior periods.
The present value of the defined benefit obligation
is determined by discounting the estimated
future cash outflows using interest rates of high-
quality corporate bonds denominated in the
currency in which the benefits will be paid, and
that have terms approximating the terms of the
related obligations. In countries where there is no
deep market in such bonds, the market rates for
government bonds are used.
Defined benefit plan surpluses are recognised
only to the extent that they are recoverable by way
of either reduced future contributions to the plan
or a refund from the plan.
Service costs comprise current service costs and
past service costs. Current service cost is the
increase in the present value of the defined ben-
efit obligation resulting from employee services in
the current period. Changes in the present value of
the defined benefit obligation resulting from plan
amendments or curtailments are recognised imme-
diately in profit and loss as past service costs.
The net interest expense is calculated by applying
the discount rate to the defined benefit obliga-
tion and the fair value of plan assets. This cost is
included in financial expenses in the consolidated
statement of profit and loss. Remeasurement
gains and losses arising from experience adjust-
ments and changes in actuarial assumptions
are recognised in the period in which they occur,
directly in other comprehensive income.
Pension and other post-employment
benefit plan costs
In 2024, net costs of EUR 25 million relating to
Hempel’s pension and other post-employment
benefit plans were recognised in the statement of
profit and loss (2023: EUR 24 million) as analysed
in the table below.
Post-employment benefit plan costs (EUR m) 2024 2023
Costs for defined contribution plans:
Employee costs 22 21
Costs for defined benefit plans:
Employee costs 2 2
Interest expense 1 1
Total costs recognised in the profit and loss 25 24
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 96
3.6 Pension and other post-employment benefit obligations — continued
Hempel’s defined benefit plans
The Group operates defined benefit plans in sev-
eral countries with the major plans being pensions
in Ireland and the UK. None of the plans are indi-
vidually significant to the Group.
The pension plans are generally final salary plans,
which provide benefits in the form of a guaranteed
level of pension payable for life. The level of ben-
efits provided typically depends on the employ-
ees’ length of service and their salary in the final
years leading up to retirement. The majority of the
defined benefit obligation relates to plans that
are funded. However, there are also a number of
unfunded plans in which the Group meets the ben-
efit payment obligation as it falls due. Recognition
of plan assets for the UK defined benefit pension
plan is restricted as the surplus in the plan may
not ultimately be recoverable by the Group.
Plan assets held in trusts are governed by local
regulations and practice in the relevant country, as
is the nature of the relationship between the Group
and the trustee boards and their composition.
The Group also operates a number of other post-
employment benefit plans which are primarily
unfunded and typically provide a lump sum payment
on leaving employment.
Movements in the present value of the defined
benefit obligations and the fair value of the plan
assets during the year are shown in the table to
the right.
(EUR m) 2024 2023
Present value of obligation at 1 January 50 51
Current service cost 2 2
Interest expense 2 2
Actuarial (gains)/losses arising from changes in financial assumptions - 1 - 3
Actuarial (gains)/losses arising from experience adjustments 2 2
Exchange differences - -
Benefit payments from employer -2-2-2 - 2 - 1
Payments from the plans - 1 - 3
Present value of obligation at 31 December 52 50
Fair value of plan assets at 1 January 32 35
Calculated interest on plan assets 1 1
Return on plan assets excluding calculated interest 2 - 2
Exchange differences - -
Employer contributions 1 1
Payments from the plans - 1 - 3
Fair value of plan assets at 31 December 35 32
Surplus (deficit) at 31 December - 17 - 18
Effect of asset ceiling - 1 - 1
Net benefit asset (liability) at 31 December - 18 - 19
Represented by amounts recognised in the statement of financial position:
Asset recognised 4 2
Liability recognised - 22 - 21
Net benefit asset (liability) - 18 - 19
The defined benefit obligation may be analysed as follows:
Funded plans - 30 - 28
Unfunded plans - 22 - 22
Defined benefit obligation - 52 - 50
The defined benefit obligation may be analysed as follows:
Pension plans - 32 - 31
Other post-employment benefit plans - 20 - 19
Defined benefit obligation - 52 - 50
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 97
3.6 Pension and other post-employment benefit obligations — continued
Of the total defined benefit obligation, 50%
(2023: 48%) relates collectively to pension plans
in Ireland and the UK.
The expected average duration of the defined
benefit obligations is 10 years (2023: 11 years)
and the expected employer contributions for the
year ending 31 December 2025 are EUR 3 million.
The composition of plan assets is shown in the
table below.
Mortality rates are also a key assumption; in
each country the most common demographic
assumptions, including mortality rates, are applied.
Sensitivity analysis
The following table illustrates the change in the
defined benefit obligation relating to defined
benefit plans due to a change in key actuarial
assumptions. The analysis is based on reasonably
possible changes, provided that other parameters
remain unchanged.
The following table summarises the key
assumptions of the defined benefit plans.
Recognised defined benefit obligation (EUR m) 2024 2023
Discount rate
Increase of 0.5 %-points - 2 - 2
Decrease of 0.5 %-points 3 2
Future wage / salary increase
Increase of 0.5 %-points 1 1
Decrease of 0.5 %-points - 1 - 1
Mortality
Increase 1 year - 1
Decrease 1 year - - 1
Defined benefit plan assets by category: 2024 2023
Cash and cash equivalents 1% 2%
Equity instruments 21% 23%
Debt instruments 57% 47%
Real estate 1% 1%
Investment funds 9% 18%
Assets held by insurance company 9% 5%
Other 2% 4%
Total 100% 100%
2024 2023
Weighted discount rate 4.55% 4.57%
Future wage / salary increase 3.60% 3.45%
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 98
3.7 Provisions
Accounting policies
Provisions are recognised when the Group has a
present legal or constructive obligation as a result
of past events, it is probable that an outflow of
resources will be required to settle the obligation,
and the amount can be reliably estimated.
Provisions for environmental, warranty and restruc-
turing obligations, as well as other obligations, are
measured at the present value of management’s
best estimate of the expenditure required to settle
the present obligation at the end of the reporting
period. The costs required to settle the liability are
discounted if the effect is material to the measure-
ment of the provision. The discount rate used to
determine the present value is a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liabil-
ity. The increase in the provision due to the pas-
sage of time is recognised as interest expense.
Decommissioning and restoration obligations are
measured at the present value of the future liability
in respect of decommissioning as expected at the
balance sheet date. The present value of the pro-
vision and changes in estimates are recognised as
part of the cost of property, plant and equipment
and depreciated together with the associated asset.
Interest on provisions is recognised in the state-
ment of profit and loss under financial expenses.
Environmental provisions
Environmental obligations relate to restoration
of various sites and to remedying established
environmental damages that occurred in connec-
tion with the production of coatings and disposal or
release of certain wastes. Management anticipates
that the resolution of the Group’s environmental
obligations will occur over an extended period, in
some cases over a period of more than 5 years.
Warranties
Provision is made for estimated warranty claims in
respect of products sold that are still under war-
ranty at the end of the reporting period. Warranty
cases are normally resolved within 0 - 5 years,
though some complex cases are resolved over an
extended period of more than 5 years.
In line with accounting policies, potential product
warranties are recognised as warranty provisions
when revenue from the related sale is recognised.
Other provisions
The Group is involved in a number of legal cases,
tax cases and other disputes. Some of these
involve significant amounts and are subject to
some uncertainty. Management continuously
assesses the risks associated with the cases and
disputes, and their likely outcome. It is the opinion
of management that, apart from items recognised
in the financial statements, the outcomes of these
cases and disputes are not probable or cannot be
reliably estimated in terms of amount or timing.
The Group does not expect these to have a material
impact on the consolidated financial statements.
(EUR m) Environmental
obligations
Warranties Other
provisions
Total
Total provisions, beginning of year 21 15 10 46
Additions for the year - 17 12 29
Reversed for the year - 1 - - 2 - 3
Consumed for the year - - 1 - - 1
Total provisions, end of year 20 31 20 71
Current liabilities 2 7 7 16
Non-current liabilities 18 24 13 55
Total provisions, end of year 20 31 20 71
3.8 Other liabilities
Accounting policies
Other liabilities mainly comprise accrued employee
costs, including bonuses, withholding tax and VAT,
customer bonuses, commission payables, accrued
interests and prepaid rent.
Other financial liabilities are measured at initial
recognition at fair value. Subsequently, other
financial liabilities are measured at amortised cost
using the effective interest method, which usually
corresponds to the nominal value. Other non-
financial liabilities arising from e.g., taxation or
employer benefits, are measured in accordance
with the appropriate standards.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 99
4 Capital structure and financing items
Accounting policies
Dividends proposed by management for the year
are presented separately within equity.
The translation reserve comprises foreign
exchange differences arising from the translation
to EUR of financial statements of the parent com-
pany and its subsidiaries. Also, the effect of the
inflation adjustment from hyperinflationary econo-
mies is recognised within the translation reserve.
The cash flow hedge reserve covers cash flow
hedging of interest rates associated with loans
and borrowings.
Share capital
In August 2024, CVC Funds acquired 22.2% of
Hempel A/S through the issuance of new B shares
in addition to the already existing B shares, which
is owned by Hempel Invest A/S. At the time of
the investment, the existing share capital was
re- structured into A, B and C classes with shares
of DKK 1 each.
The share capital has been fully paid and no shares
have special dividend rights. A shares carry 10 votes
per share whereas B shares carry 1 vote per share.
There are no voting rights attached to C shares.
The C shares have been issued in connection
with a management incentive programme.
The total number of shares issued amount to
200,422 of which key management personnel
subscribed for 118,592 shares. If a participant
ceases to be an employee of the Company,
the provisions of the plan generally permit the
Company to repurchase the leaver’s sharehold-
ings for either the original cost or fair value at the
time of repurchase, depending upon the circum-
stances. In limited instances outside the control
of the participant, Hempel has an obligation to
reacquire the shares at either the original cost or
fair value at the time of repurchase, depending
upon the circumstances.
In addition, 5,522,548 warrants were issued
in connection with this programme which give
the holder the right, in certain circumstances,
to subscribe for D shares in Hempel A/S at an
exercise price of DKK 0.01 per share. Of these,
3,267,537 warrants have been issued to key
management personnel. The warrants are subject
to the same repurchase provisions as the C shares.
As of 31 December 2024 all warrants were still
outstanding.
Dividends
The Group proposes a dividend of EUR 0 thou-
sand per share (2023: EUR 217 thousand
per share), in total amounting to EUR 0 million
(2023: EUR 25 million).
During 2024, before issuance of new shares,
ordinary dividends related to the year 2023
amounted to EUR 217 thousand per share
(2023: EUR 0 thousand per share) equal to
a total dividend payment of EUR 25 million
(2023: EUR 0 million) was paid out. Extraordinary
dividends of EUR 1.1 million per share was
paid out in 2024 (2023: 229 thousand per
share), in total amounting to EUR 132 million
(2023: EUR 26 million).
Capital structure
The capital structure of the Group is intended
to ensure sufficient financial flexibility and
stability for the Group to reach its strategic goals.
The Group aims to maintain an optimal capital
structure, and to use the free operating cash flow
after financial items and tax for debt servicing
and business development.
The Group’s dividend policy is to distribute 50%
of net profit for the year, with a lower limit of
EUR 25 million. However, due to the extraordinary
dividend payment in 2024, a change has been
made to the dividend distribution policy, so the
Group is not going to declare dividends for the
financial years 2024 to 2027.
4.1 Share capital, distribution to shareholder
Share capital, distribution to shareholder 31 December 2024 31 December 2023
Number of
shares
Nominal
value (DKK)
Number of
shares
Nominal
value (DKK)
The share capital comprises:
A shares 32,857,143 32, 857,143 - -
B shares 115,000,000 115,000,000 - -
C shares 200,422 200,422 - -
Shares - - 115 115,000,000
Share capital (fully paid) 14 8 ,057,5 65 14 8 ,057,5 65 115 115,000,000
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 100
The Group strives to ensure adequate credit
resources at all times, which includes securing
access to committed bank financing and re financing
maturing debt in a timely manner. The Group aims
to have minimum EUR 250 million of free committed
credit resources available for the next 12 months.
In order to achieve this overall objective, the Group’s
capital management aims to ensure that it meets its
financial covenants attached to the interest-bearing
loans and borrowings that define capital structure
requirements. The covenants, which the Group is
required to comply with quarterly, state that the
Group’s leverage must not exceed 4.0x. The Group’s
leverage is defined in note 5.7 Financial definitions.
At the end of 2024, the leverage ratio was 1.4x
(2023: 3.1x *). The Group aims to maintain a
leverage ratio of approximately 2.5x in the long
term while a higher leverage ratio is accepted
when acquiring strategic businesses.
Breaches in meeting the financial covenants would
permit the bank to immediately call loans and
borrowings. There have been no breaches, nor
close to default, of the financial covenants of any
interest-bearing loans or borrowings in the current
period or in the previous period.
No changes were made in the objectives or pro-
cesses for managing capital during 2024 or 2023,
except for the change to the contribution policy
mentioned above.
4.1 Share capital, distribution to shareholder — continued
* Leverage ratio for 2023 has not been restated.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 101
4.2 Borrowings
Accounting policies
Long-term loans, such as loans from credit
institutions, are recognised initially at fair
value net of directly attributable transaction
costs. Subsequently, the loans are measured
at amortised cost using the effective interest
method. The difference between the proceeds
initially received and the nominal value is
recognised as financial expenses in the
statement of profit and loss over the loan term.
The bank loans are floating interest loans based
mainly on EURIBOR. Further, the interest rate
is linked to the Group’s leverage ratio and to
achievement of the Group’s sustainability targets
aimed at reducing CO
2
emissions, landfill waste
and use of hazardous materials in production.
A negative pledge clause is attached to the
Group’s long-term loan arrangements that
prevents Hempel A/S from pledging certain
assets as security.
Secured loans
Lease liabilities are effectively secured as the
rights to the leased assets recognised in the
financial statements revert back to the lessor in
the event of default.
The Group’s borrowings consist of the following,
see table to the right:
2024 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 3.52% 2026 - 2027 548
Overdraft facilities 3.46% 2025 75
Lease liabilities 0.2% - 13.1% 2025 - 2047 129
Total borrowings 752
Current 109
Non-current 643
Total borrowings 752
2023 (EUR m) Average
interest rate
Maturity Carrying
amount
Bank loans 5.46% 2025 - 2027 1,034
Overdraft facilities 5.21% 2024 53
Lease liabilities 0.2% - 13.1% 2024 - 2047 140
Loan to parent company 6.28% 2024 57
Total borrowings 1,284
Current 145
Non-current 1,139
Total borrowings 1,284
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 102
4.3 Financial risks
This note describes the exposure to financial
risks and how these risks could affect the Group’s
future financial performance.
The Group’s activities expose Hempel to a variety
of risks related to the Group’s financial assets and
liabilities. The Group’s financial liabilities comprise
primarily borrowings, trade and other payables
and lease liabilities, whereas the financial assets
primarily comprise trade receivables and cash
deposits.
Management has assessed the following key
financial risks and their significance to the Group:
The above financial risks are inherent to the
way Hempel operates as a global company with
a large number of operating units across the
world. The Group’s overall risk management
programme seeks to identify, assess, and
mitigate these financial risks in order to reduce
the effects on the Group’s financial performance.
The risks are managed in accordance with the
policies and guidelines laid out by the Board of
Directors. Hempel has centralised handling of
these risks, except for commercial credit risk,
which is managed locally. There are no changes
in the Group’s financial risk management policies
compared to the previous year.
It is the Group’s policy not to speculate actively on
financial risks.
To some extent, the Group’s income and expenses
in foreign currencies net out and create a natural
hedge of the Group’s profitability margin. Foreign
exchange hedges are executed to reduce risks
associated with currency fluctuations in internal
balances between Group entities. See further
description under market risk.
Market risk
The Group’s exposure to market risks is related
to foreign exchange risks and interest rate risk.
All market risks are managed in accordance with
the Group’s Treasury Policy.
Foreign exchange risk
Foreign exchange risk is the risk that the fair
value or future cash flows of a balance sheet
exposure will fluctuate because of changes in
foreign exchange rates.
Hempel’s exposure to the risk of changes in
foreign exchange rates relates primarily to the
Group’s trade receivables and trade payables,
arising respectively from revenue and purchase
transactions denominated in a foreign currency
and intercompany loans and deposits. The
currency exposure in these balances may affect
Hempel’s result.
The overall objective of foreign exchange risk
management is to reduce the short-term negative
impact of exchange rate fluctuations on net
financials and cash flows, thereby contributing to
the predictability of the financial results.
To manage exposure to foreign exchange risk,
it is Hempel’s policy to pool funding activities
centrally through intercompany loans and
deposits. In each subsidiary, foreign exchange
risk derived from trade receivables or payables
is mitigated by Hempel A/S establishing an
intercompany loan/receivable towards the local
entity in the same foreign currency, thereby
creating a natural hedge.
Currency risk is, as a main policy, hedged against
DKK or EUR when exposure exceeds EUR 0.5
million (higher thresholds are applied for US, SGD,
HKD and PLN). Some currencies cannot be hedged
within a reasonable price range, in which case
correlation to a proxy currency is considered and,
if deemed appropriate, proxy hedging is applied.
Foreign exchange forward contracts are used to
hedge the exposure to currency risk. As the vast
majority of intercompany loans are hedged, and
because changes in the fair value of both the
hedged item and the foreign exchange forward
is recognised in profit and loss under financial
items, the net exposure to foreign currency risk is
deemed low, though a higher foreign exchange risk
persists in countries with high inflation.
Foreign currency sensitivity
The sensitivity analysis is based on financial
assets and liabilities recognised as of 31 December.
The table on the next page demonstrates the
sensitivity to a reasonably possible change in
USD and GBP exchange rates against EUR, with
all other variables held constant. The Group’s
exposure to foreign currency changes for all other
currencies is not material.
The impact on the Group’s profit before tax is due
to changes in the fair value of monetary assets
and liabilities denominated in foreign currencies
and non-designated foreign exchange derivatives.
Although the derivatives have not been designated
in a hedge relationship, they act as an economic
hedge and will offset the underlying transactions
when they occur.
The movement in pre-tax equity equals the
effect on profit before tax adjusted for fair value
movements of interest rate swaps designated
as hedging instruments.
Financial risk type 2024 2023
Foreign exchange risk Low Low
Interest rate risk Low Medium
Credit risk Low Low
Liquidity risk Low Low
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 103
Interest rate risk
The Group’s exposure to changes in interest rates
primarily relates to long-term loans and borrowings
with floating interest rates. The Group’s policy is
to hedge its interest rate risk depending on the
Group’s interest coverage level (EBITDA/interest).
When the Group’s interest coverage level falls below
10, the Group assesses whether it is necessary
to mitigate the interest rate risk by entering into
hedging instruments.
Hempel has fixed the interest rate on EUR 500
million of debt by entering into variable-to-fixed
interest rate swaps maturing in December 2025,
which reduces the exposure to changes in interest
rates in 2025. The interest related to the EUR 500
million debt is fixed at an average interest rate of
2.62% until December 2025.
There is an economic relationship between the
loans and the hedging instruments as both the
nominal amount and terms of the interest rate
swaps mirror the hedged exposure, creating an
equal and opposite interest receipt and a fixed
interest payment. The Group has established a
hedge ratio of 1:1 for the hedging relationships as
the underlying risk of the interest rate swaps are
identical to the hedged risk.
The table to the right demonstrates sensitivity
to reasonably possible changes in interest rates,
with all other variables held constant.
The sensitivity analysis is based on financial
assets and liabilities recognised as of
31 December and assumes that the interest
rate hedges are 100% effective. The sensitivity
analysis is based on a change of 100 bps which
is considered a reasonably possible change at
31 December 2024.
4.3 Financial risks — continued
(EUR m) Increase/
decrease in bps
Effect on profit
before tax
Effect on equity
2024
Euro + 100 bp s 1 1
Euro - 100 bps - 1 - 1
2023
Euro + 100 bp s - 2 - 2
Euro - 100 bps 2 2
(EUR m) Change in rate Nominal value Effect on profit
before tax
Effect on equity
2024
USD/EUR 5% - 47.7 - 2.4 - 1.9
USD/EUR - 5% - 47.7 2.4 1.9
2024
GBP/EUR 5% 14.1 0.7 0.6
GBP/EUR - 5% 14.1 - 0.7 - 0.6
2023
USD/EUR 5% - 66.7 - 3.3 - 2.6
USD/EUR - 5% - 66.7 3.3 2.6
2023
GBP/EUR 5% - 6.8 -0.3 -0.3
GBP/EUR - 5% - 6.8 0.3 0.3
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 104
4.3 Financial risks — continued
Credit risk
Credit risk arises from the possibility that trading
partners and customers may default on their
obligations, causing financial losses for the Group.
The Group is exposed to credit risk on cash, trade
and other receivables. Please refer to note 3.5 for
a description of the Group’s credit risk in relation
to trade receivables.
The carrying amount of EUR 273 million (2023:
EUR 280 million) represents the maximum credit
exposure related to cash and other receivables.
Hempel’s main banks are all financial institutions
with a high credit rating and, therefore, financial
assets such as cash are considered to be of
low risk.
Other financial assets measured at amortised
cost comprise other receivables. These financial
assets are considered to have a low credit risk, and
thus the impairment provision calculated based
on 12 months of expected losses is considered
immaterial. The financial assets are considered
to be low risk when they have a low risk of default,
and the issuer has a strong capacity to meet its
contractual cash flow obligations in the near term.
The Group has no material risks relating to a
single customer or business partner. It is the
Group’s credit policy to rate major customers
and other business partners on a regular basis.
Bank Acceptance Bills are used as a financial
instrument to further limit the risk of credit losses.
The Group considers a financial asset in default
when the Group is unlikely to recover the out-
standing contractual amount in full. A financial
asset is written off when there is no reasonable
expectation of recovering the contractual
cash flows.
Liquidity risk
The liquidity risk is assessed to be low. Hempel
ensures the availability of the required liquidity
through a combination of cash management and
both uncommitted and committed credit facilities.
Hempel applies cash pool arrangements for opti-
misation and centralisation of cash management.
Hempel has an undrawn credit facility of
EUR 454 million (2023: EUR 472 million).
Maturities of financial liabilities
The table to the right provides an analysis of
Hempel’s financial liabilities divided into relevant
maturity groupings based on their contractual
maturities for non-derivative financial liabilities.
The amounts disclosed in the table are the
contractual undiscounted cash flows.
Contractual undiscounted cashflows (EUR m) Less than
1 year
Between
1 and 5 years
More than
5 years
2024
Non-derivatives:
Borrowings, current and non-current 94 559 -
Trade payables 317 - -
Lease liabilities 37 81 21
Derivatives:
Derivative financial instruments 1 1 -
Total contractual undiscounted cash flows at the end of the year 449 641 21
Non-current liabilities 662
Current liabilities 449
2023
Non-derivatives:
Borrowings, current and non-current 88 1,080 -
Loan from parent company 60 - -
Trade payables 332 - -
Lease liabilities 36 84 32
Derivatives:
Derivative financial instruments 4 4 -
Total contractual undiscounted cash flows at the end of the year 520 1,168 32
Non-current liabilities 1,200
Current liabilities 520
The contractual payments for borrowings are based on the variable interest rates as of 31 December 2024. The derivatives reflect
the mark-to-market value and expected cash flows of interest rate swaps, totalling EUR 500 million maturing in December 2025,
and an additional interest rate swap of EUR 200 million maturing in December 2026.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 105
4.4 Financial instruments
Accounting policies
Derivative financial instruments, foreign exchange
forwards, currency swaps and interest rate swaps
are initially recognised in the balance sheet at
fair value and subsequently remeasured at their
fair value.
Derivatives are used for economic hedging
purposes and not as speculative investments.
Where the derivatives do not meet the hedge
accounting criteria, they are measured at fair
value through profit and loss.
Hedging instruments not qualifying for
hedge accounting
For foreign exchange forwards and currency swaps,
positive and negative fair values of these derivative
financial instruments are recognised as Other
receivables and Other payables, respectively.
Changes in the fair values of foreign exchange
forwards and currency swaps are recognised in
the statement of profit and loss under financial
income and expenses.
Cash flow hedge accounting
For interest rate swaps, cash flow hedge
accounting is applied. Positive and negative fair
values are recognised as Other receivables and
Other payables, respectively. Changes in the
fair values are recognised directly within Other
comprehensive income. The amount accumulated
in equity is reclassified to profit and loss as a
reclassification adjustment in the same periods
during which the hedged cash flows affect profit
and loss. Fair value of the interest rate swaps was
negative EUR 2.0 million as of 31 December 2024
(2023: EUR 4.5 million).
Financial instruments, fair value disclosures
The carrying amount of financial instruments
is a reasonable approximation of the fair value,
except for loans measured at amortised cost.
The carrying amount of loans measured at
amortised cost amounts to EUR 623 million
(2023: EUR 1,144 million) compared to a fair value
of EUR 624 million (2023: EUR 1,147 million).
The fair value is determined based on the present
value of expected future cash flows.
The carrying amount of lease liabilities amounts
to EUR 129 million (2023: EUR 140 million)
compared to a fair value of EUR 131 million
(2023: EUR 120 million).
Financial instruments measured at fair value
Fair value measurement of financial intruments is
categorised into a hierarchy based on the inputs
used in the valuation process. The hierarchy
consists of three levels:
Level 1: Quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included
in Level 1 that are observable for the asset or
liability, either directly (e.g., as prices) or indirectly
(e.g., derived from prices).
Level 3: Inputs for the asset or liability that are not
based on observable market data.
Foreign exchange contracts, currency swaps, and
interest rate swaps and loans are categorised as
Level 2 in the fair value hierarchy. Their valuation is
based on observable market data, such as foreign
exchange rates. Loans are classified as Level 3 in
the fair value hierarchy, as their valuation relies on
inputs not based on observable market data.
Reconciliation of liabilities arising from
financing activities (EUR m)
Non-cash movements
Beginning of
the year
Cash flows Additions Disposals Acquisitions Exchange rates End of the year
2024
Lease liabilities 140 - 37 31 - 7 - 2 129
Borrowings, current and non-current 1,144 - 523 - - - 2 623
Liabilities arising from financing activities 1,284 - 560 31 - 7 - 4 752
2023
Lease liabilities 165 - 38 12 - - 1 140
Borrowings, current and non-current 1,067 83 - - - - 6 1,144
Liabilities arising from financing activities 1,232 45 12 - - - 5 1,284
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 106
4.5 Financial income and expenses
Accounting policies
Financial income and expenses comprise interest
income and expenses, gains and losses on receiv-
ables, payables, realised and unrealised exchange
gains and losses on transactions denominated in
foreign currencies.
Financial income (EUR m) 2024 2023
Interest income 18 26
Gain on derivative financial instruments at fair value through profit and loss 16 2
Fair value adjustment transferred from equity hedge reserve 3 -
Net monetary gain 2 -
Total financial income 39 28
Financial expenses (EUR m) 2024 2023
Interest expense on borrowings - 49 - 53
Interest expense on lease liabilities - 4 - 4
Interest expenses to Group enterprises - 3 - 3
Interest expenses on financial liabilities measured at amortised cost - 56 - 60
Foreign exchange loss (net) - 24 - 38
Net monetary loss - - 2
Other financial expenses - 16 - 21
Total financial expenses - 96 - 121
Gains and losses on foreign exchange derivative financial instruments measured at fair value through profit and loss has been
presented separately.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 107
4.6 Discontinued operations
Divestment of the Decorative business in
France and Germany
In May 2024, Hempel announced the planned
divestment of its Decorative business in France
and Germany to Fidelium Partners. The divestment
completed on 1 August 2024, having received
approval from the relevant authorities. The sale
included a production site in Germany, stores in
France, around 500 employees and a portfolio of
customers. The business is reported as a discon-
tinued operation.
Divestment of Hempel Russia
On 13 July 2023, the divestment of the Hempel
assets in Russia was completed. The associated
operations were previously presented as discon-
tinued operations, and continue to be presented
as such up to the date of disposal.
The carrying amounts of assets and liabilities as of the date of sale were:
Net loss from discontinued operations (EUR m) 2024 2023
Revenue 94 202
Production costs - 76 - 171
Sales and distribution costs - 21 - 41
Administrative costs - 7 - 37
Financial income and expenses - 9 - 14
Net loss before tax from operating activities - 19 - 61
Income tax - - 1
Net loss after tax from operating activities - 19 - 62
Loss on sale of Decorative business in France and Germany - 75 -
Loss on sale of Hempel Russia 4 - 10
Net loss from discontinued operations (attributable to the shareholders of Hempel A/S) - 90 - 72
Cash flow from discontinued operations (EUR m) 2024 2023
Cash flow from operating activities - 12 - 47
Cash flow from investing activities 4 6
Total - 8 - 41
Loss on sale of Decorative business in France and Germany and Hempel Russia (EUR m) 2024 2023
Net cash received 4 6
Net proceeds receivables/payables - 5 4
Total consideration received or receivable - 1 10
Carrying amount of net assets sold - 58 - 13
Reclassification of foreign currency translation reserve - - 7
Carrying amount of building sold - 8 -
Transaction costs - 3 -
Total loss on sale of Decorative business in France and Germany and Hempel Russia - 70 - 10
(EUR m) 2024
 2
2023
 1
Non-current assets 33 11
Inventory 30 -
Trade receivables 49 -
Cash 1 1
Other current assets 6 1
Total assets 119 13
Non-current liabilities - 8 -
Trade payables - 29 -
Other current liabilities - 24 -
Total liabilities - 61 -
Net assets 58 13
1
  Sale of Hempel Russia on 13 July 2023.
2
  Sale of Decorative business in France and Germany on 1 August 2024.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 108
5 Other disclosures
Fees for services other than statutory audit of
the financial statements provided by Pricewater-
houseCoopers Statsautoriseret Revisionspartner-
selskab to the Hempel Group mainly consist of
financial due diligence and transaction advice,
accounting advisory services, and other advisory
and tax services.
Other contingent liabilities
The Group is, through its ongoing business,
involved in product liability claims and disputes in
connection with the Group’s operational activities.
The Group does not expect the pending litigations,
claims and investigations, individually and in
the aggregate, to have a material impact on the
Group’s financial position, operating profit or
cash flow in addition to the amounts accrued as
provision for legal disputes.
Hempel A/S and its Danish subsidiaries are
jointly taxed with several Danish companies in the
Hempel Foundation Group. The Group’s Danish
enterprises are jointly and severally liable for
Danish taxes at source and income taxes. Refer to
the tax administration company Hempel Invest A/S
for the total amount of corporate tax payable for
the Group of jointly taxed companies.
On 6 February 2025, Hempel refinanced the
EUR 1 billion Revolving Credit Facility (RCF)
maturing in April 2026 with a new EUR 850 million
RCF that matures in February 2030.
For the purpose of presenting the statement of
cash flows, non-cash items with effect on the state-
ment of profit and loss must be reversed to identify
the actual cash flow effect from the statement
of profit and loss. The adjustments are specified
as follows:
5.1 Fee to the auditors appointed at the General Meeting 5.3 Contingent liabilities and other commitments
5.4 Events after the reporting period5.2 Adjustment for non-cash items
(EUR m) 2024 2023
 1
Audit fee 2 2
Tax advice 1 1
Total 3 3
1
  2023 has not been restated to reflect the presentation as
a discontinued operation of Hempel’s decorative business
in Germany and France.
(EUR m) 2024 2023
Amortisation,
depreciation and
impairment
116 148
Other non-cash
adjustments
1 -
Provisions 21 9
Gains and losses on the
sale of fixed assets
71 10
Hyperinflation
adjustment
- 5
Total 209 172
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 109
Parent companies
Hempel Invest A/S
As of 31 December 2024, loan payables
to Hempel Invest A/S had been fully repaid
(2023: EUR 57 million outstanding). Interest
expense during the year amounted to EUR 3
million (2023: 3 million).
Dividend
Extraordinary dividend of EUR 132 million
was paid to Hempel Invest A/S (2023: EUR 26
million). Ordinary dividend of EUR 25 million
was distrubuted to shareholders of Hempel A/S
(2023: EUR 0 million).
Other related parties
Hempel Ejendomme A/S
Hempel A/S paid rent of EUR 5 million (2023:
EUR 0 million) to Hempel Ejendomme A/S.
The leased buildings were previously owned by
the Hempel Foundation and Hempel Invest A/S,
respectively, but ownership was transferred to
Hempel Ejendomme A/S in December 2023
(2023: Hempel A/S paid rent expenses of
EUR 3 million to Hempel Foundation).
At 31 December 2024, Hempel A/S has
EUR 1 million deposit receivable from Hempel
Ejendomme A/S in relation to office leases
(2023: EUR 1 million).
Key management personnel of the entity
or its parent
For information on remuneration of key manage-
ment personnel of Hempel, please refer to note
2.2 Employee costs. There were no material
unsettled balances with key management person-
nel at the end of the year.
5.5 Related parties and ownership
Related parties and ownership Basis
Controlling influence:
Hempel Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Ultimate parent company
Hempel Invest A/S, Amaliegade 8, 1256 Copenhagen K, Denmark Majority shareholder (77.7%)
Minority shareholder:
SeaCoat Investments S.a r-l Company no. B286172, 29,
Avenue de la Porte-Neuve L-2227 Luxembourg
Shareholder (22.2%)
Other related parties:
Members of Registered Executive Management and Board of Directors of Hempel A/S,
Hempel Invest A/S and Hempel Foundation
Related party
Key management personnel of Hempel A/S Related party
Hempel’s Employee Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel’s Cultural Foundation, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Brænderupvænge ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Keldskov ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Employee Foundation from 2017, 2800 Kongens Lyngby, Denmark Related party
Hempel Administration ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Invest II ApS, Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Ejendomme A/S,Amaliegade 8, 1256 Copenhagen K, Denmark Related party
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 110
5.6 The Hempel Group
Location Name Currency Ownership
Denmark Hempel A/S DKK 100%
Argentina Hempel Argentina S.R.L. ARS 100%
Australia Hempel (Australia) Pty. Ltd. AUD 100%
Australia Hempel NewCo (Australia) Pty. Ltd. AUD 100%
Australia Hempel (Wattyl) Australia Pty. Ltd. AUD 100%
Bahrain Dahna Paint Middle East Holding B.S.C. BHD 51%
Bahrain Hempel Paints (Bahrain) S.P.C. BHD 51%
Brazil Hempel Tintas do Brasil Ltda BRL 100%
Canada Farrow & Ball Canada Limited CAD 100%
Canada Hempel (Canada) Inc. CAD 100%
Chile Pinturas Hempel Chile SpA CLP 100%
China Hempel North Asia Holding Co., Ltd CNY 100%
China Hempel (Hong Kong) Limited HKD 100%
China Hempel (China) Limited HKD 100%
China Hempel (Kunshan) Coatings Ltd. CNY 100%
China Hempel (Yantai) Coatings Ltd. CNY 100%
China Hempel (Guangzhou) Coatings Ltd. CNY 100%
China Hempel (Zhangjiagang) Coatings Ltd. CNY 100%
Croatia Hempel Coatings (Croatia) Ltd. HRK 100%
Cyprus Hempel Coatings (Cyprus) Limited EUR 100%
Czech Republic Hempel (Czech Republic) s.r.o. CZK 100%
Denmark HSA (Danmark) A/S DKK 100%
Denmark Hempel Decorative Paints A/S DKK 100%
Denmark HF (Denmark) A/S DKK 100%
Ecuador Hempel Ecuador S.A. USD 100%
Egypt Hempel Coatings (Egypt) LLC EGP 100%
Egypt Hempel Egypt L.L.C. EGP 100%
Egypt Hempel Paints Egypt LLC EGP 99%
Finland OY Hempel (Finland) AB EUR 100%
France Hempel (France) SAS EUR 100%
Germany Farrow & Ball DE GmbH EUR 100%
Germany Hempel (Germany) GmbH EUR 100%
Germany Hempel Beteiligungsgesellschaft GmbH EUR 100%
Germany Rottkamp Immoblilien GmbH & Co. KG EUR 100%
Germany Rottkamp Immobilien Verwaltung GmbH EUR 100%
Greece Hempel Coatings (Hellas) Single Member S.A. EUR 100%
India Hempel Paints (India) Private Limited INR 100%
Indonesia P.T. Hempel Indonesia IDR 100%
Ireland Crown Paints Ireland Limited EUR 100%
Italy Hempel (Italy) S.r.l. EUR 100%
Korea Hempel Korea Co. Ltd. KRW 100%
Kuwait Hempel Paints (Kuwait) K.S.C.C. KWD 51%
Malaysia Hempel (Malaysia) Sdn. Bhd MYR 100%
Location Name Currency Ownership
Malaysia Hempel Manufacturing (Malaysia) Sdn. Bhd. MYR 100%
Mexico Pinturas Hempel de Mexico S.A. de C.V. MXN 100%
Morocco Hempel Maroc SARL MAD 100%
New Zealand Hempel (Wattyl) New Zealand Ltd. NZD 100%
Norway Hempel Norway AS NOK 100%
Oman Hempel (Oman) L.L.C OMR 25%
Oman Hempel Manufacturing LLC OMR 25%
Peru Hempel Pinturas Del Perú S.A.C. PEN 100%
Poland Hempel Paints (Poland) S.p. z o.o. PLN 100%
Portugal Hempel (Portugal) Lda EUR 100%
Qatar Hempel Paints (Qatar) W.L.L. QAR 28%
Saudi Arabia Hempel Paints (Saudi Arabia) W.L.L. SAR 51%
Singapore Hempel (Singapore) Pte. Ltd. SGD 100%
South Africa Hempel Paints South Africa (Pty) Ltd. ZAR 100%
Spain Pinturas Hempel SAU EUR 100%
Sweden Hempel (Sweden) AB SEK 100%
Switzerland Hempel Schweiz AG CHF 100%
Syria Hempel Paints (Syria) W.L.L. SYP 43%
Taiwan Hempel (Taiwan) Co., Ltd. TWD 100%
Thailand Hempel (Thailand) Ltd. THB 100%
The Netherlands Hempel (The Netherlands) B.V. EUR 100%
The Netherlands Hempel Industrial B.V. EUR 100%
Turkey Hempel Coatings San. ve Tic. Ltd. Sti. TRY 100%
UK Crown Brands Limited GBP 100%
UK Crown Paints Limited GBP 100%
UK Crown Paints Group Limited GBP 100%
UK Crown Paints Holdings Limited GBP 100%
UK FB Ammonite Limited GBP 100%
UK FB Brassica Limited GBP 100%
UK FB Brinjal Limited GBP 100%
UK FB Calluna Limited GBP 100%
UK Farrow & Ball Holding Limited GBP 100%
UK Farrow & Ball Limited GBP 100%
UK Hempel Decorative Paints Limited GBP 100%
UK Hempel UK Ltd. GBP 100%
UK Reebor Limited GBP 1%
Ukraine Hempel Ukraine LLC UAH 100%
United Arab Emirates Hempel Paints Company Abu Dhabi L.L.C. AED 24%
United Arab Emirates Hempel Paints Emirates L.L.C. AED 49%
USA Farrow & Ball Inc. USD 100%
USA Hempel (USA), Inc. USD 100%
USA Jones-Blair Company, LLC USD 100%
Vietnam Hempel Vietnam Company Limited VND 100%
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 111
5.7 Financial definitions
Financial ratios have been calculated as follows:
Organic growth =
Organic revenue
Revenue in comparative period
Organic growth is defined as revenue growth from one year to the next, based on values in
fixed currencies for both years excluding mergers, acquisitions and divestments, etc.
Gross margin =
Gross profit
Revenue
EBITDA margin =
EBITDA
Revenue
EBITDA margin, adjusted =
EBITDA, adjusted
Revenue
EBITDA = Operating profit (and loss) before impairment, amortisation and depreciation
EBITDA, adjusted = EBITDA before special items and before adjustment for hyperinflation according to IAS 29
Operating profit margin =
Operating profit (loss)
Revenue
Return on invested capital (ROIC) =
12 month operating profit less effective tax rate + Special items 
(∑
i=T
Invested capital) / 12
i=T–12
Invested capital =
Intangibles + property, plant and equipment + inventories + receivables
− provisions − trade payables − other payables
Equity ratio =
Shareholders’ equity
Total assets
Leverage ratio =
Net interest-bearing debt
EBITDA before special items (incl. full-year figures from acquisitions)
Net interest-bearing debt =
Overdraft facilities +bank loans, etc. + interest-bearing payables to Group enterprises
+ lease liabilities − cash at bank and in hand
Free cash flow = Total net cash generated from operating activities less net cash used in investing activities
Cash conversion =
Total net cash flows from operating activities before financial items and tax
Total EBITDA
Financial ratios have been calculated as follows:
Accounts receivable days =
Accounts receivable x 90
Revenue (last 3 months)
Accounts payable days =
Accounts payable x 90
Cost of goods sold + change in inventory (last 3 months)
Inventory days =
Inventory x 90
Cost of goods sold (last 3 months)
Average net working capital days = Accounts receivable days + inventory days – accounts payable days (12 months average)
The following key figures are calculated as follows (EUR m) 2024 2023
Operating profit 277 235
Amortisation, depreciation and impairment 114 113
EBITDA = 391 348
Special items, see note 2.3 - 7
Adjustment for hyperinflation according to IAS 29 1 5
EBITDA, adjusted = 392 360
The following key figures are calculated as follows:
Borrowings 623 1,087
Payables to parent company - 57
Lease liabilities 129 140
Cash - 210 - 209
Net interest-bearing debt = 542 1,075
EBITDA, adjusted 392 360
Adjustment for hyperinflation according to IAS 29 - 1 - 5
EBITDA from 1 January to date of acquisition for acquired companies - -
EBITDA before special items = 391 355
Leverage ratio = 1.4 3.1
1
1
Leverage ratio for 2023 has not been restated.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionConsolidated financial statements 112
Parent company financial statements
Primary statements
Statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . 114
Statement of financial position
. . . . . . . . . . . . . . . . . . . . . . 115
Statement of changes in equity
. . . . . . . . . . . . . . . . . . . . . . 116
Notes
1. Basis of preparation
1.1 General accounting policies
. . . . . . . . . . . . . . . . . . . . . 117
2. Results for the year
2.1 Revenue
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
2.2 Employee costs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
2.3 Income tax, tax assets and liabilities
. . . . . . . . . . . . . . . 118
3. Operating assets and liabilities
3.1 Intangible assets
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
3.2 Property, plant and equipment
. . . . . . . . . . . . . . . . . . . 119
3.3 Inventories
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
4. Capital structure and financing items
4.1 Share capital, distribution to shareholder
. . . . . . . . . . . . 120
4.2 Borrowings
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
4.3 Financial income and expenses
. . . . . . . . . . . . . . . . . . . 120
5. Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
. . . 121
5.2 Contingent liabilities and other commitments
. . . . . . . . . 121
5.3 Events after the reporting period
. . . . . . . . . . . . . . . . . . 121
5.4 Related parties
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5.5 Investments in subsidiaries
. . . . . . . . . . . . . . . . . . . . . . 122
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 113
Statement of profit and loss
Note (EUR m) 2024 2023
2.1 Revenue 246 234
Production costs - 128 - 115
Gross profit 118 119
Sales and distribution costs - 30 - 32
Administrative costs - 79 - 90
Other operating income/expenses 1 - 11
2.2 Operating profit (loss) 10 - 14
5.5 Income from investments in subsidiaries 5 18
Profit (loss) before financial income and expenses 15 4
4.3 Financial income and expenses - 22 - 32
Profit (loss) before tax - 7 - 28
2.3 Income tax 6 -
Net profit (loss) for the year - 1 - 28
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 114
Statement of financial position
31 December
Note (EUR m) 2024 2023
Share capital 19 15
Share premium 590 -
Warrants 6 -
Reserve for development costs 24 32
Retained earnings 164 252
Proposed dividend for the year - 25
4.1 Total equity 803 324
4.2 Borrowings 498 970
Provisions 12 24
Total non-current liabilities 510 994
4.2 Overdraft facilities 44 33
Trade payables 22 11
4.2 Payables to parent company - 55
Payables to Group enterprises 532 462
Tax payables 2 -
Other liabilities 32 62
Total current liabilities 632 623
Total liabilities 1,142 1,617
Total equity and liabilities 1,945 1,941
Note (EUR m) 2024 2023
Software 7 3
Software under development 17 33
Other intangible assets 11 9
3.1 Intangible assets 35 45
Plant and machinery 5 6
Leasehold improvements 21 19
Other fixed assets 1 1
Assets under construction 1 8
3.2 Property, plant and equipment 28 34
5.5 Investments in subsidiaries 1,004 915
Loans to Group enterprises 230 159
2.3 Deferred tax assets 33 23
Deposits 1 2
Other non-current assets 1,268 1,099
Total non-current assets 1,331 1,178
3.3 Inventories 22 6
Trade receivables 13 12
Receivables from Group enterprises 498 673
Tax receivables 12 -
Other receivables 35 34
Prepayments 14 10
Cash 20 28
Total current assets 614 763
Total assets 1,945 1,941
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 115
Statement of changes in equity
Note (EUR m) Share
capital
Share
premium
Warrants Reserve for
development
costs
Retained
earnings
Proposed
dividend
Total
equity
Equity at 1 January 2023 15 - - 30 372 - 417
Net profit / (loss) for the year - - - - - 28 - - 28
Exchange adjustment - - - - - 2 - - 2
Remeasurements of defined benefit pension plans - - - - - 1 - - 1
Cash flow hedging - - - - - 5 - - 5
Other adjustments
1
- - - - - 30 - - 30
Tax on equity transactions - - - - - 1 - - 1
Extraordinary dividend distributed - - - - - 26 - - 26
Proposed dividend - - - - - 25 25 -
Development projects reserve, additions - - - 8 - 8 - -
Development projects reserve, amortisation - - - - 6 6 - -
4.1 Equity at 31 December 2023 15 - - 32 252 25 324
Equity at 1 January 2024 15 - - 32 252 25 324
Net profit / (loss) for the year - - - - - 1 - - 1
Exchange adjustment - - - - 38 - 38
Remeasurements of defined benefit pension plans - - - - 2 - 2
Cash flow hedging - - - - 3 - 3
Other adjustments - - - - - 2 - - 2
Tax on equity transactions - - - - - 4 - - 4
Extraordinary dividend distributed - - - - - 132 - - 132
Ordinary dividend paid - - - - - - 25 - 25
Additional share issue and contribution 4 590 6 - - - 600
Development projects reserve, amortisation - - - - 8 8 - -
4.1 Equity at 31 December 2024 19 590 6 24 164 - 803
1
On 28 June 2023, the remaining 35% of shares in the JWO Group were acquired. The negative equity reserve, including the transaction price, has been
transferred to equity.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 116
The financial statements of Hempel A/S have been
prepared in accordance with the Danish Financial
Statements Act (Årsregnskabsloven) applying to
large enterprises of reporting class C.
The financial statements are presented in
EUR million.
Because a statement of cash flows is prepared for
the Group in the consolidated financial statements,
no separate statement of cash flows has been
prepared for the parent company (as permitted
under the Danish Financial Statements Act).
Please refer to the consolidated cahs flow
statement for the Group.
The accounting policies and presentation for
the parent company are the same as for the
consolidated financial statements with the
exceptions described in the following sections.
For a description of the accounting policies
of the Group, please refer to the consolidated
financial statements.
Revenue
Revenue is generated mainly from the sale of
goods for resale and finished goods. Revenue
is recognised in the income statement when all
significant risk and rewards have been transferred
to the customer and when the income can be
reliably measured and is expected to be received.
Revenue is measured at the fair value of the
consideration expected to be received. Revenue
is recognised exclusive of VAT and net of discounts
relating to sales.
Receivables
Receivables are measured in the balance sheet
at the lower of amortised cost and the net
realisable value, which normally corresponds to
the nominal value.
Leases
A finance lease is a lease that transfers sub-
stantially all the risk and rewards incidental to
ownership of an asset. The parent company
does not have any finance lease agreements.
An operating lease is a lease other than a finance
lease. Operating lease commitments mainly relate
to office buildings, leased cars and, to some
extent, office equipment. Payments made under
operating leases are recognised in the income
statement over the lease term.
Hyperinflationary economies
The results and financial position of subsidiaries
in Argentina and Turkey are translated into the
presentational currency EUR following the princi-
ples described in note 1.1 Translation of Group
companies in the consolidated financial state-
ments. The results and financial position in Parent
Financial Statements are not restated taking into
account inflation adjustments in hyper inflationary
economies.
Discontinued operations
Activities in Decorative business in France and
Germany, divested in 2024, and Russia, divested
in 2023, are not presented as discontinued
operations.
1 Basis of preparation
1.1 General accounting policies
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 117
2 Results for the year
All revenue is derived from activities within the
EMEA region. The following table displays revenue
disaggregated into the sale of goods per customer
category.
Disaggregation of revenue is based on internal
management reporting. The other category primarily
consists of intercompany sales.
For remuneration of the Board of Directors and
Registered Executive Management, please refer to
note 2.2 in the consolidated financial statements.
2.1 Revenue 2.3 Income tax, tax assets and liabilities
2.2 Employee costs
Deferred tax
Deferred tax recognised in the balance sheet (EUR m)
2024 2023
Deferred tax (net):
Deferred tax, beginning of year 23 13
Recognised in profit and loss 11 10
Recognised in equity 3 -
Adjustment in respect of previous years - 4 -
Deferred tax (net), end of year 33 23
The Danish corporate tax rate was 22% in 2024 (22% in 2023). At 31 December 2024, the company had recognised a deferred tax
asset of EUR 20 million (2023: EUR 23 million) which relates to temporary differences and tax losses carried forward.
(EUR m) 2024 2023
Marine 46 47
Energy & Infrastructure 11 11
Other 189 176
Total revenue 246 234
Staff costs (EUR m) 2024 2023
Wages and salaries 61 68
Pension costs 4 4
Other social security
contributions 1 1
Other employee costs 2 3
Total 68 76
Average number of
employees 425 382
Income tax
Tax for the year (EUR m)
2024 2023
Tax for the year is specified as follows:
Tax on profit for the year - 21 - 5
Tax in respect of subsidiaries 27 5
Total tax for the year 6 -
Tax on profit for the year is calculated as follows:
Current tax for the year - 4 - 10
Deferred tax for the year 11 10
Adjustment in respect of previous years - 1 -
Total tax on profit for the year 6 -
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 118
3 Operating assets and liabilities
3.1 Intangible assets 3.2 Property, plant and equipment
3.3 Inventories
Intangible assets (EUR m) Software Software under
development
Other
intangible
assets
 1
Total
Cost at 1 January 2024 17 33 41 91
Additions for the year - 7 - 7
Transfer between categories 8 - 16 8 -
Disposals for the year - - 7 - - 7
Cost at 31 December 2024 25 17 49 91
Accumulated amortisation at 1 January 2024 14 - 32 46
Amortisation for the year 4 - 6 10
Accumulated amortisation at 31 December 2024 18 - 38 56
Carrying amount at 31 December 2024 7 17 11 35
1
Other intangible assets comprise mainly brands and formulas.
Property, plant and equipment (EUR m) Plant and
machinery
Leasehold
improvements
Other fixed
assets
Assets under
construction
Total
Cost at 1 January 2024 11 25 4 8 48
Transfer between categories - 4 1 - 5 -
Disposals for the year - - - - 2 - 2
Cost at 31 December 2024 11 29 5 1 46
Accumulated depreciation at
1 January 2024 5 6 3 - 14
Depreciation for the year 1 2 1 - 4
Accumulated depreciation at
31 December 2024 6 8 4 - 18
Carrying amount at 31 December 2024 5 21 1 1 28
Inventories (EUR m) 2024 2023
Raw materials and
consumables
13 6
Work in progress 1 -
Finished goods 8 -
Inventories 22 6
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 119
4 Capital structure and financing items
4.1 Share capital, distribution to shareholder 4.3 Financial income and expenses
Refer to note 4.1 in the consolidated financial
statements for an overview of the changes in
share capital.
An amount equal to capitalised development
costs, net of tax, is reserved in the Reserve for
development costs within equity. The reserve is
reduced with amortisation and write-downs of
development projects. The reserve cannot be
used for payments of dividends.
4.2 Borrowings
As of 31 December 2024, loans from Hempel
Invest A/S was fully repaid (2023: EUR 57 million).
Overdraft facilities amounted to EUR 44 million
(2023: EUR 33 million).
Distribution of profit
(EUR m)
2024 2023
Proposed dividends - 25
Extraordinary dividends - 132 -
Retained earnings 131 - 53
Total - 1 - 28
(EUR m) 2024 2023
Interest income from subsidiaries 47 49
External interest expenses - 42 - 49
Interest income, other 1 1
Other financial expenses - 7 - 8
Interest paid to Group enterprises - 17 - 14
Realised and unrealised exchange gains/losses, net - 4 - 11
Net financial income/expenses - 22 - 32
Long-term borrowings
etc. including short-
term part (EUR m)
2024 2023
Due within 1 year 44 88
Due within 1 to 5 years 498 970
Total borrowings 542 1,058
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 120
5 Other disclosures
5.1 Fee to the auditors appointed at the General Meeting
5.2 Contingent liabilities and other commitments
The audit fee is disclosed in the consolidated
financial statements, note 5.1.
The operating lease commitments are related to
non-cancellable operating leases primarily related
to buildings, company cars and office equipment.
Payments made under operating leases are recog-
nised in the income statement on a straight-line
basis over the lease term. The parent company
guarantees unutilised local loans and bank credits
to subsidiaries.
Hempel A/S is jointly taxed with a number of
Danish companies in the Hempel Foundation
Group. The Group’s Danish enterprises are jointly
and severally liable for Danish taxes at source
and income taxes.
Refer to note 5.3 in the consolidated financial
statements for more information.
5.3 Events after the reporting period
5.4 Related parties
Refer to note 5.4 in the consolidated financial
statements for more information.
The parent company has chosen only to disclose
transactions that have not been made on an arm’s
length basis in accordance with section 98c (7) of
the Danish Financial Statements Act.
(EUR m) 2024 2023
Rental and lease obligations:
Due within 1 year from the balance sheet date 6 6
Due within 1 to 5 years from the balance sheet date 24 24
Due more than 5 years from the balance sheet date 6 12
Total rental and lease obligations 36 42
Guarantees:
For local loans and bank credits to subsidiaries 85 67
Total guarantees 85 67
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 121
5.5 Investments in subsidiaries
Accounting policies
Investments in subsidiaries are recognised and
measured under the equity method. This implies
that the proportionate share of the net result,
less amortisation of goodwill and other fair
value adjustments from business acquisitions,
is recognised in income from investments in
subsidiaries in the statement of profit and loss.
Goodwill and brands are amortised over 10 years.
Goodwill is amortised over the period the company
is expected to derive benefits from the goodwill,
which is based on the acquisition business case.
The investments are measured in the balance
sheet at the proportionate ownership share of the
net asset value of the enterprises with deduction
or addition of shares of unrealised intercompany
profits and losses.
The total net revaluation of investments in sub-
sidiaries is transferred upon distribution of profit
to ‘Reserve for net revaluation under the equity
method’ under equity. The reserve is reduced
by dividends distributed to the parent company
and adjusted for other equity movements in
subsidiaries.
Subsidiaries with a negative net asset value are
recognised at EUR 0. Any legal or constructive
obligation of the parent company to cover the
negative balance of the subsidiary is recognised
in receivables from subsidiaries or as a provision.
Impairment of investments in subsidiaries
In 2023, an impairment of EUR 32 million
was made in the parent financial statements
recognised within income from investment in
subsidiaries. The impairment test was performed
based on the principles described in note 3.2 in
the consolidated financial statements.
Decorative business in France and Germany
The additions are a result of capital increases in
the Decorative business in France and Germany
that took place before it was divested.
Investments in subsidiaries (EUR m) 2024 2023
Cost at 1 January 1,045 1,049
Additions for the year 99 -
Disposals for the year - 99 - 4
Cost at 31 December 1,045 1,045
Net revaluations at 1 January - 276 - 195
Exchange rate adjustments 26 - 14
Remeasurements of defined benefit pension plans 2 - 1
Net profit for the year 71 93
Amortisation and impairment of goodwill and brands - 66 - 75
Dividend received - 56 - 47
Disposal 95 - 9
Other adjustments
1
97 - 28
Net revaluations at 31 December - 107 - 276
Carrying amount at 31 December 938 769
Recognised in the statement of financial position as follows:
Subsidiaries with negative equity - 66 - 146
Investments in subsidiaries 1,004 915
938 769
Subsidiaries with negative equity are recognised in the statement of financial position as
follows:
Recognised as provisions - 12 - 24
Recognised in receivables from subsidiaries - 54 - 122
Net value at 31 December - 66 - 146
1
2024: As part of the sale of the Decorative business in France and Germany the remaining
Intercompany loans were written-down, which is presented under other adjustments.
2023: On 28 June 2023, the remaining 35% shares in the JWO Group were acquired
resulting in an adjustment to the carrying amount of the subsidiaries, which is presented
under other adjustments.
Please refer to note 5.6 in the consolidated financial statements for an overview of the
Hempel Group and please refer to note 4.6 in the consolidated financial statements for the
total loss related to the divestment of the Decorative business in France and Germany.
Hempel Annual Report 2024
Financial statements
Sustainability performance Corporate governance
ESGStatements
Our business
IntroductionParent company financial statements 122
Hempel A/S
Lundtoftegardsvej 91
2800 Kgs. Lyngby
Denmark
Tel: +45 4593 3800
Email: hempel@hempel.com
hempel.com
CVR no. 59946013
Financial year:
1 January – 31 December
Auditors
PricewaterhouseCoopers
Statsautoriseret
Revisionspartnerselskab
Strandvejen 44
2900 Hellerup
Denmark
Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2024-01-012024-12-312023-01-012023-12-312025-05-21Tanja Kobbernagel213800IH11IDUT6WSM06Reporting class C, large enterprise599460132025-03-04529900VSWLQF0O3GA94633771231Strandvejen 442900 HellerupOpinionBasis for Opinion2025-03-043377123133771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen442900HellerupDenmark213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember1213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember2213800IH11IDUT6WSM062023-01-012023-12-31cmn:ConsolidatedMember213800IH11IDUT6WSM062024-01-012024-12-31213800IH11IDUT6WSM062023-01-012023-12-31213800IH11IDUT6WSM062024-12-31213800IH11IDUT6WSM062023-12-31213800IH11IDUT6WSM062022-12-31ifrs-full:IssuedCapitalMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:IssuedCapitalMember213800IH11IDUT6WSM062023-12-31ifrs-full:IssuedCapitalMember213800IH11IDUT6WSM062022-12-31ifrs-full:SharePremiumMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:SharePremiumMember213800IH11IDUT6WSM062023-12-31ifrs-full:SharePremiumMember213800IH11IDUT6WSM062022-12-31ifrs-full:WarrantReserveMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:WarrantReserveMember213800IH11IDUT6WSM062023-12-31ifrs-full:WarrantReserveMember213800IH11IDUT6WSM062022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800IH11IDUT6WSM062023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800IH11IDUT6WSM062022-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800IH11IDUT6WSM062023-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800IH11IDUT6WSM062022-12-31ifrs-full:RetainedEarningsMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:RetainedEarningsMember213800IH11IDUT6WSM062023-12-31ifrs-full:RetainedEarningsMember213800IH11IDUT6WSM062022-12-31HEM:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember213800IH11IDUT6WSM062023-01-012023-12-31HEM:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember213800IH11IDUT6WSM062023-12-31HEM:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember213800IH11IDUT6WSM062022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800IH11IDUT6WSM062023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800IH11IDUT6WSM062022-12-31ifrs-full:NoncontrollingInterestsMember213800IH11IDUT6WSM062023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember213800IH11IDUT6WSM062023-12-31ifrs-full:NoncontrollingInterestsMember213800IH11IDUT6WSM062022-12-31213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:IssuedCapitalMember213800IH11IDUT6WSM062024-12-31ifrs-full:IssuedCapitalMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:SharePremiumMember213800IH11IDUT6WSM062024-12-31ifrs-full:SharePremiumMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:WarrantReserveMember213800IH11IDUT6WSM062024-12-31ifrs-full:WarrantReserveMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800IH11IDUT6WSM062024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800IH11IDUT6WSM062024-12-31ifrs-full:ReserveOfCashFlowHedgesMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:RetainedEarningsMember213800IH11IDUT6WSM062024-12-31ifrs-full:RetainedEarningsMember213800IH11IDUT6WSM062024-01-012024-12-31HEM:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember213800IH11IDUT6WSM062024-12-31HEM:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800IH11IDUT6WSM062024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800IH11IDUT6WSM062024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember213800IH11IDUT6WSM062024-12-31ifrs-full:NoncontrollingInterestsMember213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember1213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember2213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember1213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember2213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember3213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember4213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember5213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember6213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember7213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember8213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember9213800IH11IDUT6WSM062024-01-012024-12-31cmn:ConsolidatedMember10xbrli:pureiso4217:EUR